The churning behaviour in US stock indices continues. There had been a shallow uptrend in the S&P500 and Nasdaq, with the Dow and Midcap S&P400 lagging. Last week the Midcap re-compressed twice and those compressions soon broke downwards. This was on fears that US interest rates would rise a tiny bit two years from now. The result is that our lukewarm bullishness is now set aside and we would sell a rally back up to the level of that new compression in the Midcap – shown in the second chart below:
There was also a compression in September Dow emini futures, from which that index also fell and which will be easier to monitor. Sell an approach to the low of this compression which is at 34083. We expect to find resistance at the level of compressions that break down, just as markets find support at the level of compressions that break upward (see the Gold ETF chart below). This is the ‘attractor’ phenomenon found in many complex systems:
We have been looking for a place to buy Gold again, and feared that we might not get a signal as sometimes happens. There is still no signal in God itself , but there have been bottom extensions in the main Gold mining ETF that we follow and in platinum. The ETF has also dropped to the level of an older compression, where we expect support. Buy Gold.
All signals provide by software developed by our friends at Parallax Financial Research www.pfr.com
