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Far-East bottom extensions, commodity update

Equity indices in Malaysia, Indonesia and Singapore all made bottom extensions yesterday and have rallied so far today. The rallies have been modest compared with the sharp move up from yesterday's lows in the main US indices but it seems likely that some kind of low point has now been reached in these Asian markets from which they can now rally more:

East Asia bottom ext

The drop took prices down to the area of our stop-loss on the existing long trade in Singapore as advised in the August 4th edition but this new signal means that we would treat this as a new trade, so fresh risk and profit levels will be published shortly. We are usually reluctant to increase the risk on the same trade, so will attempt to tighten the new stop as soon as practicable.

Elsewhere, we are 'timing out' of our various commodity long positions. Gold timed out yesterday and there was a 4-hourly top extension in corn toward the close on Monday, the 10th:

Corn 4 hour top

This leaves only one outstanding commodity long position - in Brent crude as advised in the August 4th edition. This will 'time out' after the usual 15 days on the 25th August but we always start to examine commodity positions for reasons to abandon trades after 10 days, which will be on Tuesday the 18th. We still have a broadly bullish posture toward commodities and now there is some spare capacity there are two other candidates to buy. Both Cocoa and Sugar have made bottom extensions in recent days so either (or both) may now be bought. The relevant signal is in March 2016 delivery sugar but the month to buy is October 2015:

Cocoa and sugar bottom ext

We want to try buying precious metals and grains again as part of the present 'campaign' and will look for reasons to do so. In the meantime, our rules restrict us to only three positions that point in the same direction in commodity markets so we may not have space to do so even if we get any signals - nonetheless we will publish them here if seen.

Elsewhere, the $ index has compressed and moved down in the last few days. This can be sold - the futures are liquid enough to trade but there is also another alternative. £/$ rates compressed lately and seem to be breaking in the direction of a weaker $/stronger £ so buying British Pound futures would be a similar way to express the same view - i.e. that the $ will weaken.

There is another potential trade in currencies. The Euro has been rising against the Swiss franc lately and has now made a daily-scale extension. Try selling the Euro/ buying the Swiss. Charts:

$ index, $£, € swiss