There has been a collection of signals from various far-Eastern equity indices that indicate an up-move is likely to be underway. We have been broadly bullish for this region for a long time, although we were caught out by the Chinese government's assault on its own tech sector, shortly after we had advised buying the market.
Now, there are fresh reasons to look on these markets favourably again, as the following charts show. Some are breaking up from compressions; there has been a bottom extension in Korea; Malaysia continues to be the perkiest of the lot:
Meanwhile, US stocks continue to churn sideways and have just made a series of fresh compression signals. The all-important Mid-cap indices have re-compressed at a weekly scale:
While Dow futures have done so at a daily scale. As always when a compression signal occurs, it means that a break out of the range is imminent but we have no way of telling if it will be up or down. It is time to withdraw to the sidelines until that break occurs:
Meanwhile, Copper futures have compressed again and are (today, so far) breaking upwards. This negates the prior advice to sell a bounce back to the prior compression, so we are sidelined here too. If this break upwards is still sustained through the closing bell, we would exit any shorts:
Lastly, Energy. We pointed out a top extension in crude oil in the last edition. We rarely advise selling at top extensions as they usually don't lead to a drop - they are just a warning that an up-move is nearing an end. We suggested preparing to sell and that remains our advice. There is a high point coming soon and it could be sudden. We will watch carefully - here is an update:
All signals provided by software developed by our friends at Parallax Financial Research www.pfr.com