LET’S LOOK AT THE S&P 500 DAILY CHART

Last show I indicated the index would top around the time window of 270 to 274 days from low and the move down would be caused by a move up in the dollar index, which at the time had a probable higher low. 

The down day came with a huge volume spike, largest volume in three months, and looks exceedingly bearish.  The huge volume must have been related to the quadruple options expiration so I’m not sure how much weight to put on that trading. But the index has still not broken any support so don’t get too bearish yet.  If the trend has turned down as it appears then the move down should go to between 1030 and 960 and last 22, 30 or 45 calendar days.  Once we see the nature of the downtrend then the price and date can be forecast.  I don’t know how this could look any more bearish but this move down still needs to be confirmed as a trend.  The timing is the 31^st then 6^th and 15^th/16^th of January.  The one year cycle on the 6^th could be significant but we need to see if this is going to trend.

The one bullish thing that could occur is a break of the “obvious” support and start back up to the highs.  That “false break” of the “obvious” could set up a springboard to exhaust this uptrend.  But for now we are looking for a move down of at least 30 days and 90 points.  

LET’S TAKE A QUICK LOOK AT THE US DOLLAR INDEX

The low was at the corresponding 270 day cycle.  Two weeks ago I indicated the possible higher low was a signal the uptrend could actually occur after 6 months of attempts at a higher low.  The minimum move up in this circumstance should be ¼ of the decline or 78.75.  If this is a normal counter trend in a bear trend it could reach the 80’s at 1/3 to 3/8 retracement.  The largest previous rally was 4.08 leaving 78.9 as matching that move and an important measurement.  This will likely still run the same cycles as the stock index so around the 30^th then January 14^th.  Remember because this was a struggling trend down if the low was valid it needed to be a fast trend up and that has occurred.          

LET’S LOOK AT FTSE 100

Two weeks ago I explained why there was a good chance for a high in the FTSE from a 144 calendar day cycle.  And just as with all the stock indexes it appears as though the cycles nailed the high but this has not been confirmed as trending down, it just appears to be completing a distribution.  The next timing is the 22^nd but that is too soon to look for support if the trend is down.  Then January 9^th at 180 days from low and 21^st at 48 days into the new cycle and February 14^th at 216 days from low and 72 days from high.  Yes, this looks quite bearish but there is no confirmation of trending down.  We’ll monitor to see how the index approaches these time windows.          

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.