Last week we had a problem with the graphics and couldn?t get my forecast for 2005 presented. So here it is this week

LET?S GO TO THE S&P WEEKLY CHART

I have drawn two rectangles that I believe will roughly enclose the trading for the next year. The next few months will produce a bullish consolidation. This could take either of two forms, but more than likely will be an upward tilting affair. This consolidation will appear as a weak up trend after a few more months. Then the index will go into an exhaustion phase of the advance. This will cause the trend to accelerate, likely produce a couple rising or accelerated trendlines and drive it into a top in early 2006. How do I know there will be an exhaustion leg to end this bull campaign? Because that is how bull campaigns complete their trends.

You can look at the 1942 to 1946 bull campaign or the 1982 to 1987 bull campaign, although this will be much short than the 1980?s campaign as the 50 year cycle isn?t present this decade. This is the 5^th year of a decade and has never been a down year in the past century.

The only other alternative is to find a low this week and go directly up to 1260 - 1270, to be followed by a full correction of 90 days. I don?t believe that alternative will occur.

NOW LET?S LOOK AT THE S&P DAILY CHART

Last week I indicated that any rally that materialized from that pattern of trend would fail. The rally was only one day, but the move down could not get legs. After Thursdays reversal day, Friday showed no follow through and when no sellers showed up the index was boosted by short covering.

The October decline was 52 points in 13 days and last week I though we would hold that measurement on this decline and the index is now down 43 points in 10 days. It looks like the lack of sellers on Friday will bring about a rally attempt early this week. Considering the fact that I believe the index will be in a trading range the next three months, I don?t believe the rally off this low will get legs. If I am wrong about consolidating now, the only alternative is that possible to run to 1260 from this position and then go into a three month (90 day) correction. And that is what will occur if this forecast is not valid. But for now this looks like the next rally will fail rather than follow the pattern of trend as occurred when the counter trend completed at the end of October. If the index can go down more than 13 days it would help confirm this as a consolidation. Next cycle is this weekend or this coming Friday or next Monday.

CNBC ASIA

LET?S LOOK AT THE DAILY CHART HANG SENG INDEX

Last week I pointed out how the index had come down 7 days and landed on the March high, it then took 11 days to get back to the high. If you look closely, the rally consisted of a 5 wave pattern or a completion of some sort. So 11 days up followed by a new low within 5 days or ® the time it took to rally, indicates there was a lot of selling pressure. The index then stopped at the previous high which is a normal place to find support. Holding this support level does hold the trend intact - but I don?t believe that is the case. Looks to me like the first rally from this level will fail and retest this low or go to 13,000 would be a better level for significant support.

NOW LET?S GO TO THE WEEKLY CHART OF THE HANG SENG INDEX

You can see the index moved up three weeks into the arrow and showed a wide range week down. The pattern of three weeks up to the high of the one week rally, followed by a wide range down is an indication of trending down. At the very least it is an indication of the current trend having ended and the start of a consolidation or correction. This correction has not gone deep enough to damage the trend, but I also believe the current up trend is temporarily complete.

INSTEAD OF THE NIKKEI WE?LL LOOK AT THE TOPIX INDEX

This is the same picture as the Nikkei, there were three thrusts down while in a sideways pattern and that can set up a completion of the sideways pattern and a resumption of the uptrend. The index has subsequently move up to the obvious resistance of the previous highs and stalled - as would be normal if the trend were up or down. Friday?s low was a bit of an exhaustion day down and should, therefore, be the low if the index is going to reestablish the up trend.

If the Australian ASX 200 index goes up into Friday or Monday there is a possibility of an important high from time cycles. Again, that is a probability and against this extreme momentum there needs to be evidence of trending down before considering there could be a change in trend.

There will be no message next Monday as I will be in Europe during the week.˜ I will be on CNBC live˜on Friday the 28th of January, around 5:50 am, ˜London time˜which is around 4:00 pm Australian time.˜˜˜