CNBC EUROPE

LET?S LOOK AT THE FTSE 100 INDEX DAILY CHART

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My forecast called for this index to move up into the end of last week for a possible top from time cycles.˜ Please understand time cycle represent probabilities. It is the reality of trading that gives the ?TIME? probability a chance of being valid.˜ I also had forecast the price level to be around 5313 and 26 points is close enough to be valid, there were two other calculations that were published in Monday?s internet report that gave last weeks price level.˜ So the end of the week the index was 90 days from low, 180 days from low, 225 days from low, 270 days from low and one year from low.˜ This is a very obvious 90-day vibration low to low and now the index has gone up into that time window.˜ That represents a probability for top.˜

The reality of the pattern of the trend is now showing it is possible to be at an end to this current leg up.˜ That pattern being a small ?False Break? top. Of course there needs to be a few days of follow through or Friday was just a one day wonder.˜˜˜

The price objectives to the downside are either the high of 23^rd June or the high of 17^th February.˜ With this style or trend those tend to be strong support.˜˜˜

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

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Last week we discussed the significance of the index closing on the high or low for the day. We also discussed the significance of ?follow through? and how important it can be at critical points in the markets. You can see the index made a clear break away from the upward tilting congestion, yet could not follow through.˜ That can be a serious failure. The index closed on the low, so there is an outside chance it simply capitulated the move down in one day and the sell off is complete.˜ But I am a bit concerned for this leg of the up trend here.˜˜ I have been looking for a correction from this leg to be followed by a low that starts an exhaustion leg up.˜

If there is no follow through to the downside,˜ then Friday did no damage and the trend and it can resume.˜ But ft there is some follow through to the downside the index could go down to 1217 or 1205. IF this does produce a high, the best time for a low is not until August 18^th and the best price for low at that time is 1196 to 1205.˜ I really need to see if there is any follow through to Friday?s move down before I can have a lot of confidence in a forecast.

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Crude oil did exceed 4 days up so it could be resuming the up trend.˜ I doubt that scenario and still believe this is part of a distribution stage before a reversal in trend. But it has proven it is not trending down by exceeding 4 days of rally.

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CNBC ASIA

These Asian markets continue to be ?smokin?.?˜ But they are also exhausting.

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LET?S LOOK AT THE HANG SENG DAILY CHART

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The index continues in the exhaustive style of trend as we discussed the continuation signal last week and how it indicated higher prices.˜ And since this is in an exhaustion style or mode of trend we can apply trending criteria for that specific mode of trend.˜ That trending criteria indicates this trend should not correct back more than a first-degree counter trend of one to four days or the up trend will be at risk of completing. If it does correct more than 4 days, then the next rally has a probability of showing a lower high or the start of some sort of consolidation that could develop into a top. ˜But for now this is moving in a vertical mode.˜ The best ?time? I have to end the drive is not until September 9^th and that appears too far away considering the exhaustive nature of the trend.˜ Best price resistance is 14980 +- 10 points or between 1590 through 15183.˜ Those are nearby resistance.˜ If the index can move through those levels, then the old highs or at least marginally above 16000 becomes the target.

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NOW LET?S LOOK AT THE ASX 200 INDEX

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Last week we looked at the All Ordinaries Index.˜ This week we?ll look at the ASX 200 Index.˜ Both these indexes are close to the same.˜ Using the same methodology for price resistance the minimum target for this index is 4420.˜ That resistance could end this leg of advance.˜ There is also a ?time? that could offer some very difficult resistance this Wednesday.˜ I do not have any where near the evidence to indicate if this leg up will complete the entire bull campaign.˜ Because of the nature of the cycle it is possible, but I couldn?t qualify this as probable. ˜So we?ll see if 4420 can be hit this week and if the cycle on Wednesday is formidable.˜

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The Crude Oil rally did exceed 4 days, so anything is possible to the upside.˜ I still believe this is a distribution pattern forming.˜ And subsequently a top in this market.

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My forecast for the US Dollar Index to top August 5^th still looks like a probability, but it needs to go up into that date to be valid.˜˜˜˜˜˜˜˜˜˜˜˜˜˜

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