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Compressions in US equities, Europe in resistance. Commodity extensions

There were more daily-scale compressions in US equity indices yesterday, reinforcing the point that US markets remain range-bound and that the range may still be traded from both sides. The Fed decision to raise rates in line with expectations might provoke a break of the range but we cannot tell which way. If it is upward then there is still the possibility that a bubble may inflate as this modest monetary tightening comes too late to reign in the bull market. We wait.

Nasdaq & S&P100 comps

European stock have rallied sharply, especially our favourite 'long candidate' the DAX. Prices are now in resistance from old compressions that formed and broke downward just over a week ago. One example will do to show the situation - the MDAX index of German secondary stocks. This means that there may be some reversal of this up-move. from hereabouts.

MDAX return to comp

We have taken profits on European and Japanese longs today but may look to re-establish them on a dip. Brave souls could short-sell the usual 'short candidates' of France, Italy and Spain - perhaps France being the best one - for a short-duration trade.

Elsewhere, soya meal futures made a daily-scale bottom extension yesterday to complement the weekly-scale version seen last week. Prices have weakened a bit since that first signal but this still looks like a good 'long' position.

Soya meal dly, wkly exts

There have been bottom extensions in energy markets too, but these are failing to provoke much of a bounce (yet). The reason is probably that energy is not a true 'free market' and is under much international government influence - the Saudi Arabians and their Gulf allies are pushing out a lot of crude to try and maintain market dominance and this is tough to fight. Still, we do expect a bounce and are trading from the long side. Charts:

Crude bottom exts