LET?S LOOK AT THE FTSE 100 DAILY CHART

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That was a huge four-day move up last week.˜ I said I had some doubts that could be the low to rally back up from since it would leave the index in a strong position for another leg up.˜ And that appears to be the case with the huge weekly move last week.˜ The chart we?re looking at is a weekly chart and notice how the two previous corrections during the bull campaign struggles down.˜ This is typical of corrections or counter trends in a bull campaign and is really quite logical, as one would expect a move down against a strong trend to be weaker than the trend.˜ You can see the last correction was not a struggle but a sharp move down followed by an even sharper move up.˜ Since the move down ended leaving a space between the previous high and the current support and since it has moved above the previous breakaway point marked with a dash line this could very well be a new leg up and one to exhaust the bull campaign.˜ The probabilities are not as strong for forecasting a move up when the move down is a spike or strong as is this circumstance.˜ We can assume a few things to be true.˜ IF this is a new leg up, it should hold any correction to 4 trading days.˜ The probabilities for further advance following a sharp move down as compared to a the previous struggling moves down is not nearly as strong but I do have to assume this is a new leg up. This drive will be at risk when marginally above the previous high.˜ If that is not a problem, then the minimum move up would be to 5720 (1/4 extension) and maximum move to 5915 (® extension).˜ There should be some consolidation of last weeks vertical move up during this week with either a two or three day move down or a sideways congestion of a few days. But the minimum move is a marginal new high.

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LET?S LOOK AT THE S&P 500 INDEX DAILY CHART

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Last week I indicated the index had moved to a critical point.˜ And the weak rally the two previous weeks had also developed into a possible very powerful base pattern.˜ That pattern was a three higher low base and if valid would produce a fast trend up.˜ So any further move up would confirm the base and indicate a possible 90 or 180-calendar day exhaustion move up to complete the bull campaign as per our January forecast.˜ If that was a valid base pattern the index should not go back into that base or it wouldn?t be a base.˜ So the 1204 level will again become important and should provide support if tested.˜ For now I am assuming a new high in the index.

If this is a move consistent with this ?Pattern of Trend? we could anticipate the high to be between 1260 and 1270.˜ If this move up is consistence with the 20 and 60-year cycles, the high will be above 1300 and could be well above it.˜ The nature of the trend will forecast which scenario.˜ For now I am assuming 1260 to 1270 unless the nature of the trend indicates a stronger trend.

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Crude oil is still struggling down and has not resolved the question of the direction of the next move.˜

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CNBC ASIA

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LET?S LOOK AT THE HANG SENG DAILY CHART

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Last week the break below the December 2004 high appeared to be an exhaustion of the move down.˜ If that exhaustion ended the move down I couldn?t say last week.˜ So we looked at the weekly chart and found the last drive up was very weak relative to the other legs up and does create a risk this move down could be a trend.˜ We determined that the current support level around that December high was also very important to holding the up trend intact. Currently there are now three weeks trading the same range, so a higher low would be the key to resuming the up trend.˜ The date I had for a low was not until November 14^th and I still believe if the index goes down into that date it will represent an important low. You can see the same 3 or 4-day distribution pattern this past week that was also at the two previous highs.˜˜˜˜˜˜

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LET?S LOOK AT THE DAILY CHART FOR THE ASX 200 AUSTRALIAN INDEX

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Two weeks ago we identified the exhaustion low but could not qualify the magnitude of the rally.˜ It could go 7 to 12 days and produce a lower high and the downtrend could resume or it could resume the up trend.˜ I could not tell by the evidence on the chart, but the 4500-level appear probable.˜ As you can see the index showed one down day in the 5-day charge upward. Now the index has reached the previous breakaway point.˜ That is the point the last exhaustion move up in September had to break above to break away from a sideways pattern.˜ Moving above that level will give the appearance of resuming the trend.˜ The pattern of trend indicates there could be a few days of congestion at this point, but I am still unable to say if this rally is resuming the up trend.

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LET?S TAKE A LOOK AT A COUPLE NIKKEI CHARTS

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The first chart is one we?ve looked at a few time before AND IS A WEEKLY CHART.˜ This is the range from the bear market low up to the April 2004 high broken into 1/8^th and 1/3^rd.˜ The move up was one year and the move down into low was one year.˜ As you can see April/May 2005 low was at a 3/8^th retracement of that range.˜ Our projection for a top to this move up was forecast at a 3/8 extension of that range and the index is almost at that level.˜ Due to the nature of this trend it is more likely to will go to a 50% extension at around 1466.

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NOW LET?S LOOK THE DAILY CHART

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You can see there are now three ascending trendlines.˜ These accelerating trendlines are identifying a blowoff trend.˜ That is a trend that will show a large exhaustion into the next high.˜ Therefore the 3/8^th extension from the previous charts appears to be to close to end the trend.˜ So hang on this will be a vertical move until its over.˜ The first time the index corrects back more than 4 days the uptrend will be complete.˜˜˜˜˜˜˜

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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.