US equity markets have continued to rise and still have not produced any top extensions. We are waiting to see if a short-sale opportunity presents but there is no reason to attempt it yet. Those indices in other countries that we showed as having extended in the last edition all stalled for a few days but have now started to push higher again. Those extensions are ringed in the next charts and are all still just about 'in date' so some further weakness could start in the next few days - Singapore has even made a new top extension. As ever, we prefer to wait for some signs that a top has formed before attempting an aggressive short posture. We would also not hold longs in any stock market except Japan and maybe the UK (see below). If you still have any other longs, take profits and wait.
Those equity markets that had traded sideways into compression signals that we also published last week are updated here. Norway and Spain might be pushing up above the levels of their weekly-scale signals (it's too early to tell) but Japan has definitely pushed up from the daily-scale signals there. Japan is too dangerous to sell and dips can be bought for the next week or so. Support will be found at or near those compressions, about 1% below here:
The UK is anomalous as the domestic stock market is cheap by most measures and the difficulties caused by Brexit are all prospective, not actual. The market has started to rise lately and pushed up from some daily-scale compressions a few weeks ago. The market has since generated some upward momentum which seems likely to continue for a little while. We advised buying this for the long-term many months ago, starting in the December 13th edition and that long-term view has not changed. This current 'upleg' is just the process of value being belatedly recognised, as the great Benjamin Graham first recognised in the 1930s. The history:
Elsewhere, some commodity markets have started to compress. These signal are restricted to Cotton, Soya oil and Sugar so far but it shows that pressure is building up for a new move. As ever, we can't guess which direction this will take - compressions signify a 'knife-edge' which can easily tip either way.
Interestingly, Cotton made a weekly-scale bottom extension after the large drop into the first recent low in May, which is a clue that the next move might be upwards, whereas Sugar already seems to be breaking downward:
All signals courtesy of software supplied by our friends at Parallax Financial Research www.pfr.com