Two important US equity indices made daily-scale compression signals yesterday and appear to be breaking down today. Because there is an important announcement due from the FOMC in an hour, it is unwise to anticipate a break until nearer the close, but if prices are still below yesterday’s lows toward today’s close then we would sell the remaining half position short that began with Monday’s advice to sell the first half. Charts:
Other new signals today are a bottom extension in cocoa, which can now be bought, and a compression in natural gas futures that may be breaking upward in the session so far. If it does so at the close, that may be bought too:
This means that we have recently advised short positions in US, non-Eurozone European and Asian equity markets and long positions in Coffee, Sugar, Cocoa and Natural gas, having exited a long copper position today. This is probably too many positions that point in the same direction, so please be careful here. We ourselves did not take the sugar long position, choosing coffee instead and now we have to make another choice between nat gas and cocoa (and sugar where the signal is still ‘in date’) – we will probably choose cocoa.
