- New Science in old markets -

Bubble watch – stocks stir again. Commodity bear developments

There have been some fresh compressions in stocks since the last edition on the same subject.  These shown here are all US examples but they tell the same story - a market that is poised to move (we think upward) but has yet to begin. The first chart shows the popular mid-cap futures contract that compressed for the four days ending on Monday and broke up from that compressed condition yesterday.

The second shows why the up-move stalled again today (so far) as several Nasdaq instruments compressed yesterday, just as that mid-cap was rallying. These new Nasdaq compressions have yet to break.

Lastly, the overall compressed condition is further reinforced by a fresh weekly-scale compression in the S&P. A break is coming and we are long, expecting that it will be upward for reasons given here often but there has not yet been a decisive start.

Midacap, nsdq, S&P comps

The commodity markets appear to be slumping again after recent strength. Copper compressed last week and is apparently breaking down this week - we will have to wait until Friday's close to be certain but it may be worth 'jumping the gun' with a short-sale hereabouts just in case there is more weakness in the next two days. More weakness is almost certain at some point (see our video on cycles) and it could well start now.

Wheat already compressed at a weekly scale and broke down, while the rally in cotton failed exactly where we would expect it to at an old weekly-scale compression. We remain short of both these crops and of corn too:

cop, wht, cotton weekly comps