CNBC EUROPE

LET?S LOOK AT THE FTSE 100 DAILY CHART

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Last week the index showed a 2-day sell off that conformed to a first-degree counter trend of 1 to 4 days and therefore held the trend intact.˜ The second day down found support on top of the previous high, thus holding a strong position for the current rally.˜ The previous 12 day correction moved down to ª retracement of the range and is a relatively small retracement indicating support had come in at a high level.˜ The last high was a 1/8 extension of the range.˜ A full ª extension is 5550 and should be hit.˜ I also do have strong resistance at 5524 and could give a correction.˜ It needs to show a new high within the next two days or something is wrong with this trend.˜˜

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LET?S LOOK AT THE S&P 500 INDEX

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Wednesday I gave a report about a panic cycle that has shown up at all panics in this index. IF that were the circumstances Thursday and Friday would have been large wide range days.˜ That did not occur but the S&P has moved to a critical point within this trend.˜ The market is at ?obvious? support after a completed leg up and if the rally from this level is weak, it can represent a counter trend rally and the trend could then be down.˜ Considering everyone in the world believes the index is going to rally this week, it is a good time to pay attention to the rally.˜ This rally needs to move above a resistance level or the index is still vulnerable to trending down.˜˜ The previous rally was 13 points and the rally on Friday produced 13 points also.˜ So it has not moved above the minimal resistance.˜ The next important resistance (if the trend is down) would be the midpoint of the sideways move marked with a dash line.˜ Moving above the low of the 15^th would go a long way to indicate the trend is not down and may be resuming upward.˜ If a new low is hit within the next two days it could indicate a fast trend down is in effect.˜ If it can move above resistance then my forecast can still be valid for a fast trend up starting this quarter. But this is the critical point by the analysis of this pattern of trend.˜ This is the ?obvious? place for a low and if this rally fails it could still bring in a fast move down. If it holds, then the bull trend should resume.

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LET?S LOOK AT THE NIKKEI MONTHLY CHART

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Remember, ?All highs and lows are exact proportions of previous moves? those portions˜ are 1/8^th and 1/3^rd.˜ The index corrected three times against the 3/8 retracement level.˜ The 3/8^th retracement holds the trend in a strong position for the next rally and should manage a 3/8 extension or above 14000.

If we looked at a daily chart you?d see this was currently in a vertical exhaustion style of trend.˜ So chasing this market if your not participating would be difficult.˜ But this should exhaust and correct and that correction could be considered for positioning.˜ A valid correction should hold a ª retracement if it occurs.˜˜˜˜˜˜

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CNBC ASIA

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LET?S LOOK AT THE HANG SENG INDEX-DAILY CHART

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Last week we looked at how the index had been struggling down but needed an up day to hold the positive aspect of the pattern and it did rally.˜ The index is almost in the same position as last week.˜ The index has show a wide range day up, followed by a smaller range day that was marginally higher and now two days down.˜ If by the 4^th day down it has not broken last Tuesday?s low. It probably will not break it.˜ If it does turn up then it needs to move above the spike high of last Tuesday in less or the same amount of time it took to come down if the up trend is going to resume.˜

Currently the index went 6 days up and now 11 days later it is still well above the low that brought in the 6 day rally.˜ So it is definitely struggling to go down.˜ Twice the number of days difference is usually enough to change the trend.˜ So six days up and Monday will be 12 days and should be a low.˜ That low could stretch until Tuesday but no further if the up trend is going to resume from this pattern.˜˜˜˜

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LET?S LOOK AT THE ASX 200 DAILY CHART

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Last week there were some time cycles that I thought were strong enough to bring about a multi-day congestion for the week rather than an advance. That did occur and now the last thing on the chart is one day down on Thursday and a weak rally on Friday. So today?s advance is coming from a one day move down or a one day counter trend down in an up trending market and came with "spacing." The up trend should resume.˜ There is some timing for Monday but I don?t see risk until 8 October, which looks quite strong, and a move up into the October date could be very significant.˜ I still believe our minimum objective of 4610 to 4620 should be hit on this drive, which remains intact.˜˜˜˜˜˜˜˜

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LET?S LOOK AT THE NIKKEI WEEKLY CHART

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Last week we looked at the monthly chart and determined the price levels that would be normal for this up trend to reach.˜ We should see a minimum of 14000.˜ The only problem with the current move up is it is too fast.˜ This trend could exhaust before our objective and show a scary correction (which would likely be a buying opportunity) before hitting the forecast price level.˜ That correction should not exceed a ª retracement. But while in this exhaustion phase the index should not correct more than 4 days.˜ The strongest time period this year for a top of some sort is Oct 27 to Nov 3 and we?ll watch this closely at that time window.

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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.