The behaviour of equity markets around the world has been quite divergent lately. There were bottom extensions in Canada, Australia and Hong Kong as already reported and now there have been more drops, leading to more bottom extensions - in the main Hong Kong index, the Hang Seng, and in Brazil which has dropped by over a quarter since a top extension reported in the September 4th edition:
This comes at a time of fresh compressions in some US indices (here we show the Dow industrials) and in Italy, Sweden, Finland and France (shown here as the only example) meaning that the tight ranges seen lately are soon going to break. At the time of writing these breaks seem to be downward but this must be confirmed nearer the day's end before we can assume a new drop is coming. A rally within the day could still lead to an eventual upward break, so we wait. There may be an opportunity to tighten stops on our outstanding long recommendation in S&P futures - we will report asap.