This appeared on our website in a timely manner but the notification system failed to send emails informing readers that we had written it. Sorry – this repeat should solve that
The sell-off into Friday’s lows in stocks produced more bottom extensions in very many US sector indices (not shown here – we already advised buying in the last edition) and in other national indices around the world. Here are the main four:
Which (unsurprisingly) means that we think that all will rise. Be careful though – we remarked in the last edition that a range would probably form and this doesn’t change that advice. Ranges can be wild and wide, so watch out.
In addition, some of those bond markets that rallied to new highs on this equity sell-off have now made top extensions. Here are the most important two:
So we now advise selling them short. As ever when top extensions occur, it may be that these markets will not simply reverse, but may need to ‘churn’ for a while before they can fall. Start selling now though as ‘spike’ tops do happen, especially in circumstances like these.
Gold made a daily-scale top extension, as reported in the February 25th edition, when we advised selling short, soon. It has fallen a lot since then but in the meantime it also made a weekly-scale top to match the reported daily signal – see first chart below. The subsequent drop has produced daily-scale bottom extensions in Platinum and Silver (see second and third charts below) which probably means that none of these will drop much for a while and there may be more bounces. We remain bearish of gold however (that weekly signal will last for about three months) so it is probably best to trade it from the short side, selling rallies and covering some on dips:
Lastly, there has been a daily-scale bottom extension in Wheat (buy it) and the perennially weak Natural Gas market has produced bottom extensions at weekly and monthly scales, It looks like it is time for a general commodity rally. Buy Nat gas to go along with any other energy contracts you may have bought last week on our advice.
All signals courtesy of software supplied by our friends at Parallax Financial Research www.pfr.com
