There have been daily-scale top extensions in the Eurostoxx futures contract in the last few days:
As usual, this means that the rally is on shaky ground but not that it will necessarily turn around and drop from here – there may need to be some kind of ‘top’ that forms before any weakness is possible. However,we have been thinking (and writing) for some time that most equity markets are range-trading and there need not be much time spent in ‘top-building’ if we are just seeing a visit to the top of the range again…
If this important European index is about to falter, we would bet that others will too – watch out everywhere. There is a medium-sized turn due tomorrow (see the turn calendar on the front page so the timing is right.
All signals courtesy of software supplied by our friends at Parallax Financial Research www.pfr.com
