CNBC EUROPE
LET?S LOOK AT THE FTSE 100 DAILY CHART
Last week there were some vibrations in ?time? or cycles that created a window in time that could end this trend. The market will have moved through that time window if it now moves higher. The 4 or 5-day correction was within the confines of a counter trend that keeps this up trend intact. Because that counter trend was a very small correction in price it is indicating it?s either going to explode upward or there would be a need to consolidate or correct since the trend was getting a bit abnormal. It is now up 99 days up and that is getting a bit long in tooth without a more significant correction.
On Thursday it had its test of the significant support level and if it is going to run, it aught to get going NOW. If not then that correct could still be in the cards. This is an exhaustion trend and is getting long in tooth at 99 days with only first-degree counter trends.
LET?S LOOK AT THE S&P 500 INDEX
This market has been creeping upward for three weeks until Friday when it gave the first follow through in either direction. The two previous weeks I had been explaining the significance of ?follow through? when a market closes on the high or low for the day. It also closed on the low Monday. This move down was the first time there was ?follow through? since the process started. Now I am hoping to see this correction extend but remain a small correction that either stops at the previous June high for a bounce or moves down to 1204 for a significant bounce. Remember, this coming low is the low I believe should be the last low before the final fast trend up into the first quarter of 2006. I have been saying for the past three years the index is following the same historic trends of 1945 and 1985. The final correction before the exhaustion in 1985 was 71 days. The final correction in 1945 was either 31 or 45 days depending upon the low chosen. By historic standards, this last 90-day move up was weak and therefore does leave a probability of further strength to the down move.
LET?S TAKE A QUICK LOOK AT CRUDE OIL
?All highs and lows are exact proportions of previous moves.? You can see the market gave a 3/8th retracement and is now against that high. If this trend is going to continue (I still have some doubts), it could go to a 3/8th extension and that would be a fundamental reason for further correction in stocks. You can see the index did a downside test when it hit the high and was successful. So if it is going higher, it needs to do so now.
US Dollar index may have found a low for a 18 or 36-day rally if it can stabilize here.
CNBC ASIA
LET?S LOOK AT THE HANG SENG DAILY CHART FIRST
Three week ago I identified this move up as an exhaustive style of trend. This meant the trend would hold to some very specific criteria to stay intact. For instance, if this trend could correct back against itself for more than 4 days it would be a strong indication the trend was complete.
We also had some resistance levels that were critical to the trend. Last week I indicated there was resistance between 15090 and 15183. I expected to see a correction from that level. If there could be a ?normal? counter trend down from that level and a resumption of the trend, then the objective would be above 16,000. But for now the index has proven the resistance and we?ll need to see what style of counter trend develops. This resistance would indicate a rather small advance for an exhaustion leg considering the history of this market. It stopped at calculated resistance, now we look for evidence of trending down or evidence of a counter trend down that is completed.
LET?S LOOK AT THE AUSTRALIAN ASX 200 INDEX
This index has not hit the minimum price objective and has been moving sideways for 8 days prior to Friday?s marginal break to the downside of the pattern. There are some very strong cycles between last week Wednesday and this Tuesday that can bring about a significant correction. These are probabilities and I thought there would not be a big problem unless it could first reach 4420, last week was 26 points away from that target. But the length of this sideways pattern and the market running on the side into this time window could still be a problem for this trend. Support is obvious at the old high, I?ve put two little arrows highlighting that obvious support. BUT when markets exceed 6 trading days ?on the side? one must be very careful as the first move out of the pattern can be a false move or false break. So if this small move down on Friday was a marginal or false break the index should see some wide range days upward and push through this resistance in ?TIME? and possibly even the price resistance. Remember, "fast moves come from false breaks.? This will be obvious within the next few days if that is the case.
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.
