There has been renewed weakness in equity markets today, taking prices back down to the bottom of the week's ranges in the main US and European indices. There are conflicting signals at work here, so this is a very delicate moment.
Daily-scale bottom extensions occurred in several US, European and Asian markets recently, as reported. Such signals indicate that a price drop is 'sold out' and should therefore end or pause - some reaction to the drop should occur in other words, perhaps a bounce. We always issue 'buy' recommendations on these signals and have done so here.
There is a larger-scale signal however that may point in the opposite direction. As we have published here before, there have been a series of weekly-scale compressions in US and European equity indices, the most recent of which was in a NASDAQ index last week. Prices are trading just below the compression and if they close below it at the end of the week (tonight) then more weakness is highly likely. A rally today could bring prices back into the compression and lead to a postponement of the eventual break - which could then be in either direction. A chart update: