We have pointed out some top extensions lately in equity indices and now we are seeing a few more. There are also some compressions and all this seems to point down, for at least a dip. First the extensions:
There have been daily-scale and weekly-scale tops in some French and German indices:
Japan has produced daily and weekly-scale tops, albeit in different indices - the first daily coming last week:
All of which seems to show that the enthusiasm for stocks around the world is likely to pause for a while very soon. Please remember however that uptrends generally end after a process of gradual 'topping' that only starts with top extension signals so it is unwise to sell short aggressively at this stage. However, there are a few opportunities. Some indices have not risen at all and a few are now compressing. Selling a break down from a compression is a much better plan than selling short at top extensions, so consider these candidates for short-selling. Norway has already broken downward today, so can be shorted immediately, but Singapore and Hong Kong have yet to break in either direction:
Obviously this means that we should start to be cautious about our remaining equity market long positions in S&P futures, XME mining SPDRs and the Nikkei (these last two positions are half-size after already taking some profits). Sell the remaining Nikkei now and we will review the other two in the next day or two.