There is due to be a large equity turn today, as warned. This is not quite a full grade 1 turn as there are too few components from Europe but it is a strong grade 2. This coincides with new highs in US futures (this is normal, as we expect new extremes in existing moves on big turn days) but this new strength has been caused by news of an Iran deal. This does not invalidate the signal as a famous market sage once remarked that breaking news is: "…at best the tardy recognition of forces that have been at work for some time". It does however mean that it is sensible to wait for some early signs of reversal before jumping on to the bear wagon with both feet in case there is some more short-covering to come in the next day or two.
There have been some stock index compressions lately (Taiwan being the latest after Spain, France and Sweden) which show that a new move is imminent. Although we still expect equity markets to stall soon, we are always cautious when compressions arrive, preferring to wait for them to break before committing wholeheartedly to a view.
Stay wary here.
RE
