A Hong Kong Index that we follow has made top extensions for the last two sessions. We also expect the biggest turn of the month today (see the current Alpha Mail) and this combination seems to indicate that the new year enthusiasm for stocks will be short-lived and that a dip will soon follow. The swings in that particular index are getting bigger, so any downturn from hereabouts could be up to 7-8% in extent:
Elsewhere, Gold has risen from around $1240 to its present level of around $1320 in three weeks. There are now signs of a top extension forming today, as shown here. We qualify this with the word ‘forming’ because the day is not yet over and there is some chance that the signal will disappear by the close. We will send warning if it does but our present view is that the up-move will have trouble in going further. This doesn’t necessarily mean an imminent collapse, but it is further warning that the ‘bull market in everything’ as the Economist put it a few months ago is getting more dangerous than ever:
All signals courtesy of software supplied by our friends at Parallax Financial Research www.pfr.com
