There is an equity market turn due in the three-day period ending today, as published in the October 6th turn update. This comes as many indices are rallying sharply from lows made mid-way through last week on the 15th or 16th October which argues that a high point will be made hereabouts and that it should be used to sell short again. There are some resistance levels that come from older compressions in US indices quite close to present prices, as shown below. These may be tested very soon, so we advise selling US index futures short again on any slight further gains today. Scale-up sales are probably best in such circumstances and stops may be placed above the compressions. We will comment further as the next few days go by.
There is more resistance 4-6% above current levels in European indices but that is so much higher up that it will only be reached if these new US short-sales are already losing money. We will probably advise selling some Europeans quite soon, expecting that they will stall before these distant old compressions are reached:
