On Friday, the latest new strength in the late-year stock rally produced a flurry of top extensions at a daily scale:
These are across all the main measures of US equity market prices and so we should pay close attention. There are also some smallish turn clusters due today and/or tomorrow as can be seen in the December turn schedule on the front page or here. This combination of top extensions with a turn always makes us issue a sell recommendation and so we do here. Sell.
Any fall in the next few weeks will probably not be big as the longer-term picture remains bullish. Stocks broke up from weekly-scale compressions in several indices just three weeks ago and those compressions will offer support if re-visited. The most likely outcome from this tension between medium-term bullish and short-term bearish is a dip, probably back down to those compressions about 3% below here followed by a resumption of this quite new uptrend.
Accordingly, if you want to sell short on this advice, don’t risk much as the rewards are likely to be modest.
A merry Christmas to all our readers.
All signals courtesy of software supplied by our friends at Parallax Financial Research www.pfr.com
