- New Science in old markets -

FTSE extends – take profits

One data series in FTSE futures that we follow has made a daily-scale top extension:

FTSE top ext ends long trade

If you are still long from our recommendation in the January 15th edition, as amended in the January 27th edition, take profits now. We are inclined to be a bit bearish of most of the world's equity markets lately, due to the appearance of quite a large number of daily-scale top extensions, as reported recently, so this latest signal is in line with that view. If you are tempted to reverse into a short because of this signal, please be careful for more than the usual reasons for prudence when a top extension occurs. The whole UK stock market is still cheap and it has much more rally potential. We are inclined to re-buy once this signal has 'worked off' in a few weeks  - maybe even sooner.

All signals courtesy of software supplied by our friends at Parallax Financial Research www.pfr.com