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CNBC EUROPE

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LET?S LOOK AT THE FTSE 100 DAILY CHART

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Last week we looked at the weekly chart that had a vibration in time that could have produce a significant amount of resistance to the up trend for last week.˜ Last week I indicated most stock indexes around the world were in a position to exhaust into highs.˜ Most notably in the US and European Indexes. The FTSE did not have an exhaustion style of trend so we needed to rely upon the daily price action to give a clue whether this index can break away from the April/May highs.˜ Thursday showed an exhaustion day and Friday showed another wide range down proving Thursday was an exhaustion of some sort but the move down didn?t break any support.˜ But now there is an exhaustion spike up and that becomes very helpful to a technical analysis.˜ If the index cannot get above that spike high this week it will put the trend at risk as it would make a lower high possible.˜ The time window to bring in a lower high would likely be 4 days.˜ If the rally exceeds 4 days it will exceed the time of a normal counter tend and thus put a lower high in doubt-still possible but not within the normal time window.˜˜ The only risk I can see at this time is a move back to the September highs.˜ This index has a history of distributing for a few weeks before changing trend.˜ The top to the left had side of this chart took 4 weeks to form.˜ We should be able to look for a lower high from this pattern IF it is going to trend down.

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LET?S LOOK AT THE S&P 500 INDEX

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Last week we were looking for evidence of an exhaustion of this trend.˜ The time period had run out but due to the nature of the ?PATTERN OF TRENDING? there still needed to be that move up that was a little more vertical and a few more days up than the previous recent multi day moves up.˜ I thought 1393 would be the price level and the index is a few points short of that price.˜ If the index can close below 1370 it will go a long way to indicate the exhaustion is complete.˜ Moves against an exhaustion style of trend almost never exceed 3 days and the index is down one day.˜

Personally I believe this trend may have exhausted or is within a few days of that completion but no real evidence yet just a probability.˜ Nobody should look to sell or short a high momentum trend without at least a lower high present.

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NOW LET?S LOOK AT THE DAX INDEX

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This is a classic blowoff or exhaustion style of trend.˜ Three ascending trendlines are the indication of an exhaustion trend.˜ Once a market gets into that third ascending trendline or the fastest and terminal part of the trend the counter trend moves down almost never exceed 3 days down and price does not pull back into the previous resistance until the trend is complete. So there are two benchmarks to indicate when this trend is complete.˜ When this trend exhausts (which it could have done) it will be followed by a sideways pattern that will have the low between 250 and 300 points down from the high.˜˜˜˜˜˜˜˜˜˜˜˜

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CNBC ASIA

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Last week I indicated most world stock indexes were in the exhaustion phase of their advances and have one multi-day move up to complete their trends.˜ I indicated that exhaustion of their trends would be followed by a correction but that correction would be part of a sideways pattern and not a complete change in trend.˜ I reminded everyone this is currently the fastest part of those trends.

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LET?S LOOK AT THE HANG SENG INDEX

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This has been a very interesting and instructive trend.˜ We have looked at how the index broke away from the congestion.˜ When the index went 90-calendar days low to low it set up three dates into the future that could terminate the trend or at least represent some difficult resistance.˜ The first was 135 days from low on the 26^th then Nov 4^th and very important 180 days from low on Dec 10.˜ You can see the exhaustion that occurred on the 26^th with a big gap up and closed on the high yet couldn?t follow through the next day.˜ Whether that was a temporary exhaustion of the trend or something more significant I can?t yet say.˜ A drop below 18,100 would be the first indication this could be a significant exhaustion.˜ But for now that is support.

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LET?S LOOK AT MY AUGUST FORECAST FOR THE TOPIX

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As you can see my forecast has been spot on for the index and is now at a critical point on the chart.˜ Since September 12^th was not part of the vibration in ?time? for this index there was another cycle we?ll look at ?time? in a minute.˜ But now that the index has made it to a marginal new high the question is; will it come back into the pattern as my forecast showed?˜

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LET?S LOOK AT THE CURRENT DAILY CHART

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The vibration in ?time? has been 67 calendar days and half the cycle has been spot on which confirms its validity.˜ Please understand resistance in ?time? is just like resistant in ?price? if it can be broken it can produce a fast trend just as some of the European stock indexes resolved this weak pattern of up trend to the upside a few months ago.˜ Whenever there is a weak trending structure with three drives, as this has been, there is always a risk of a fast move in the opposite direction when the last rally is complete.˜ I don?t believe that is the circumstance here and any correction should hold the September lows in the worst-case scenario.˜ But this is now in a critical position where it will either start a fast move up or follow my forecast and show us some downside testing.˜ The NIKKEI showed a big gap down and wide range day on Friday and could need to consolidate that move with a rally or inside day today.˜ But it did leave an ?island? and could indicate an important exhaustion to its trend.˜ This is a very important week for this index.˜˜˜˜˜˜˜˜˜˜˜˜˜˜˜

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Disclaimer: All the reports and content in the entire McLaren Report web site (including this report) are for educational purposes only and do not constitute trading advice nor an invitation to buy or sell securities. The views are the personal views of the author. Before acting on any of the ideas expressed, the reader should seek professional advice to determine the suitability in view of his or her personal circumstances.