Stock markets have regained some or all of the losses incurred in the sharp drop on Friday 9th of this month and the subsequent few days. The support that we identified from weekly-scale compressions in the September 11th edition held perfectly, as shown in the first chart below and now there has been a very good bounce, especially in Nasdaq-related instruments. The equivalent support in the Nasdaq (another weekly-scale compression) is much lower down as you can see from the second chart and we do not expect it to be tested. The last of these three charts is included to emphasise that Nasdaq futures have now just made new highs and this seems to confirm our idea that we have been voicing for months that the Nasdaq is a good candidate for the bubble that we think is probably coming.
There are also some fresh reasons to be bullish, from a scattering of daily-scale bottom extensions that we have been seeing in minor indices around the world. This began with Australia immediately after the first drop last week and has now continued in Mexico and Portugal. These minor market signals are often straws in the wind when they occur in groups like this and this group seem to have combined with the turn that was due last Friday (see the current turn update, still on the front page of the site) to make a low point that may be significant for many markets:
All signals courtesy of our friends at Parallax Financial Research http://www.pfr.com