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