LET?S LOOK AT THE FTSE 100 DAILY CHART
Last week I said the consolidation may not be complete and indicated it would either see a struggle upward for the week or a one or two day sharp move down and recovery. The index showed a two-day move down. Friday?s reversal back down after testing the obvious resistance is not unusual but if there is follow through to the downside today it does present a temporary problem for the trend in that there would be further struggle upward. That struggle should be upward for another week or two and the low of the two-day counter trend should not be breached if the trend is to remain intact. I still like this index moving up into January 24th for a possible high.
LET?S LOOK AT THE S&P 500 INDEX DAILY CHART
Last week I explained a method for determining a strong advance was taking place. Our only question is will the index stop at 1260 1270 or will it exhaust as the 20 and 60 year cycles are indicating and would put the market above 1320. You can see the index moved against the old high or what I refer to as the ?obvious?. There are very specific patterns of counter trend or consolidation that will show up at the ?obvious? and help to forecast the future. So far there is nothing within the trend to present a problem other than it is currently running in an exhaustive pace of advance and will likely consolidate in some way this week. This looks like a trend that can run into the second week in January as a target in ?time.?
QUITE A FEW OF YOUR VIEWERS ASKED ME TO LOOK AT COPPER.
The copper chart is weekly and from 1970. It is obvious that copper trades like every commodity, it will base for years and run up into an exhaustion style high and reverse into a bear trend. In this instance the market has broken above a price level that has held back advances for over 30 years. Make no mistake this is a ?blowoff? or exhaustion of the trend and it will end by Mid-December maybe much sooner as it is currently running vertical. If it ends earlier the price could be anywhere from here to around the 211 price zone. Forecasting the end to blowoff moves that are ripe with short squeezes is very difficult, so my price and time forecast must be taken with the understanding this is a best guess at this time, although it does come from 40 year experience. So not to run past Mid-December and price not past the 211 zone until the price action indicates something else probable.
LET?S LOOK AT THE HANG SENG INDEX
Last week the index had come up into a short-term cycle and represented resistance. The index was also at the ?obvious? resistance of the old low. You can see the correction was again only two days or a first-degree counter trend after resistance at the obvious-bullish if it can hold that price early in the week. But now there is a small trend in place that is either a very weak trend that would be followed by a fast move down or is a base pattern which will give a new high. If it can show another higher low it will confirm the base and a new high will follow. Since Friday showed a large gap up it could have temporarily exhausted this move up. Remember the last rally into the top was a weak rally and the move down was strong. If this is another weak rally the index is in trouble. I don?t believe that is the case but it is a probability until the nature of the move up is qualified. If the index has produced a base it will show another higher low this week or just continue vertically upward. If this has been a weak rally and not a base (and that is possible) it will break that second higher low this week and be at a new low by next week. So the trading this week or even early this week will forecast the direction of the trend for the next few months.
LET?S TAKE A LOOK AT THE AUSTRALIAN ASX 200 INDEX.
We?ve been looking for this index to test the ?obvious? resistance of the old high and hesitate. As you?ve learned from watching this show, when a market trades against the ?OBVIOUS? it can be very enlightening. As you can see the move is getting a bit exhaustive and should show some kind of consolidation or counter trend this week. I am assuming the congestion will remain bullish (I?ll be able to tell you that) and the index will run to above 4800.
LET?S LOOK AT THE NIKKEI WEEKLY CHART
We?ve looked at this chart on numerous occasions and is the roadmap in PRICE for this bull campaign. Once the low was in place at a 3/8 retracement I forecast a move to a 3/8 expansion. A couple weeks ago I said the nature of the trend or the ?pattern of the trend? was such that the 50% extension would be the next resistance. The index is now up to that price level. There could be some consolidation at this price level, but that is not assured because of the nature of the easily identified ?blowoff? pattern of trend. The multi-year cycles indicate this could run until either Mid-January or even April. The only problem with April is this is an exhaustion or blowoff style of trend and something needs to change within this form of trend or it will definitely blow itself up well before that April date. The January date is very reasonable; it depends upon the price action that occurs at this level the next week. Remember this is a blowoff style of trend so when it losses its momentum it will be complete. As I said last week I believe there could be a consolidation of some kind around this price level but should reach the 152 to 154 price level.
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.