CNBC EUROPE
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LET?S TAKE A LOOK AT THE FTSE MONTHLY CHART
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When you look at the move up on the left, please understand that is a 60 to 72 year phenomenon.˜ That pattern of trend is not going to repeat on this chart for another generation.˜ But this trend could exhaust in the same manner as 1997 or stop at any temporary exhaustion as just occurred and that could be the end of the trend.˜
So please understand anytime we can conclude a trend or leg up has completed, it either represents a great buy because each advance will be as fast or faster than the previous leg up until this trend is complete-that is just the way this style of trend behaves. Unlike the previous 1998 through 2000 charts, this will show a fast reversal when complete, as it will exhaust the intermediate term trend.˜ There will not be a long-term top as occurred 1998 through 2000.˜
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NOW LET?S GO TO THE FTSE DAILY CHART
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Remember, I was able to identify this current move up as a fast, exhaustive style trend because of the nature of the monthly chart we just saw.˜ Fast trends or exhaustion style trends have very specific criteria they will follow so as I mentioned a few weeks ago if that last horizontal line was broken it could indicate the trend had changed.˜ Now we need to determine if the trend can resume or was this last exhaustion, the one that exhausted the larger trend.˜ There were two price levels that can hold the up trend intact.˜ The first and most powerful for an advance is 5235 and where it is now, then a zone between 5184 and 5160.˜ Trading below that level makes 5082 next and that will hold for a while and could be an important low.˜ Exceeding the 12th trading day down will confirm a more serious problem with the trend.˜˜˜˜˜˜˜˜˜˜˜˜˜˜˜˜˜
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LET?S LOOK AT THE S&P DAILY CHART
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Last week I indicated the index was going to 1204 last week.˜ Friday?s low was 1204 as indicated on the chart.˜ I had drawn a trend line from low to low, which would actually be a line that is measuring the downward momentum of the move.˜ You can see Wednesday push below that line Thursday showed a very, very weak rally considering the length of the previous days range and the fact that it closed on the low.˜ So Friday?s move down was decisively below that momentum line which indicates a high momentum move down is now in progress.˜ I had previously forecast we would see a low Friday at 1204, but the manner the index has come down to this support by breaking a momentum line is indicating it is currently in a free fall or a high momentum move down. Since the index is in a free falling type of trend, 1190 is the next support and could be Tuesday for a low.˜ If it cannot hold that level, then it?s 1177.˜ So it is a matter of seeing some evidence this is not a free falling market as could be the case if 1204 is broken. Since this is a high momentum move any rally past three days would indicate the downtrend is complete.˜ Let me explain this situation again, once that momentum line was broken this index could do almost anything to the downside as it is now in a fast move down.˜˜˜˜˜
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CNBC ASIA
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LET?S LOOK AT THE HANG SENG DAILY CHART
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Seven weeks ago I identified this move up as an exhaustion leg up for this trend or in other words a vertical move up.˜ Two weeks ago I identified the trend had exhausted. If one were to study the history of trading in this index you would find that it seldom leaves an exhaustion hanging out on the chart by itself.˜ The index usually retests an up-side exhaustion in some manner.˜ So last week I indicated the top was in place.˜ And since the largest previous move down was 6 trading days we could look for a minimum of 6 days down, Friday was the sixth day down.˜ The normal retracement that still holds the trend in a strong enough position to retest the high is no more than 3/8th of the range up.˜ I?ve marked that 3/8th retracement on the chart at 14625.˜ I anticipate a low at or above that level and an attempt to retest the high over the next two weeks.˜ Yes, I know crude oil is a wild card in this circumstance.
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LET?S LOOK AT THE AUSTRALIAN ASX 200 INDEX
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Last week the index pushed to a new and closed on the high for the day.˜ As I?ve been stating for years on this show.˜ When an index closes on the high or low for the day one should pay particular attention.˜ Because, if that ?close on the high or low for the day? cannot immediately be exceeded, it indicates an exhaustion of the move of some sort.˜ The significance of the exhaustion would need to come from other analysis as for instance where within the trend it had taken place.˜ In this instance, if it dropped back below the previous high (horizontal line) it would confirm an exhaustion of some sort did occur.˜ The previous week we had a series of cycle that could have ended the trend. This is still a probability, but as I indicated last week I believe the index is going to show a consolidation of some sort. The long-term price objective for this trend is not very far away. Since it is down big today the last low was not a false break pattern this index will likely go lower.
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LET?S TAKE A QUICK LOOK AT THE NIKKEI
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This is a monthly chart and many months ago I forecast a bull market for this index.˜ This is now ?do or die? for this index.˜ As you can see it has tested the support level three successful times and a fourth test will go through the lows.˜ We can also see support coming in at a high level and as bullish as that might appear it can also be the form of an intermediate term counter trend up in a down market.˜ So if this bull trend I forecast is going to occur, the next few weeks are critical.˜ And I am troubled by the exhaustive manner in which the index has approached the old high.˜ Next week we?ll look at the daily chart and see if we can determine the future for the next few months since this is at the critical juncture within this intermediate term picture.˜˜˜˜˜˜˜˜˜
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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.
