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CNBC EUROPE
LET?S LOOK AT THE FTSE WEEKLY CHART
If one studies the ?time? of trends there are many circumstances when one can say with confidence this trend will last no less than a specific period of time. In this instance that time period was 90 days. So after low was established I could report that this index will go up into the 19th of January since that is the minimum this trend should go in ?time.? So let?s see this weekly chart. The arrows are pointing to the space between the previous resistance and where support came in. The spacing between those points showed support at very high levels, which continued to indicate a very strong trend.
The first drive in 2004 was 26 week and 785 points, second drive was 23 weeks and 759 points and currently in the 12th week and now up 609 points. The last leg on many occasions will be the shortest of the three in time. Although twelve weeks could be a bit shorter than normal but we do need to be alert at the end of the week. The price objectives that look strongest to me were above 5900 and the furthest in time was April 21st. All I can do is see how the index moves into this time window and report next week. But because this is the exhaustive phase of the trend we need to see some evidence of an exhaustion or a lower high before concluding the trend is complete.
NOW LET?S LOOK AT THE S&P 500 INDEX
We had the same circumstance in this index where I could say this index will go up for the next three months into at least the 11th of January as a minimum move in time. I also felt the minimum move up in price would be to 1300 within that time window. The high was on the 11th of January and the price was 1294.9. Don?t be too impressed that I could call the date of a high months in advance. As per my forecast for 2006 I don?t believe there will be much of a correction from this level. The worst case is marginally move below the horizontal lines (December highs) and best case for the trend is a low Tuesday and a resumption of the trend at this same fast pace. Whenever this advance resumes it will be as fast or faster than the previous advance. This is the exhaustive phase of this trend. As I noted last week in my 2006 forecast the only section I was unsure of was this end of January time window. The reason being I can?t qualify the correction from these cycles, it just represents a probability within a fast trend up that is far from exhausting. I believe the worst-case scenario for a correction here, if there is one is a move to marginally below the December highs followed by a vertical move up.
CNBC ASIA
THE HANG SENG INDEX
Last week I explained a pattern of trend that allowed me to indicate this index was in a fast move up. The next resistance in ?time? is not until January 27th and the trend should continue until that date.
THE ASX 200 AUSTRALIAN INDEX
My forecast was for a move up into the end of this week. I thought that could be significant resistance two months ago when I made the forecast, but now it looks like a consolidation. It does look like one more drive is possible after a consolidation around this price level. My forecast was for the All Ordinaries to hit 4850 to 4860 this week a significant move above that resistance puts the next price a 240 points higher or 5100. March 15th looks like the next important date.If there is a move down from 90 days the low could be at 96 days if the index is going higher and not consolidate or correct from this cycle.
LET?S LOOK AT THE NIKKEI DAILY CHART
As I have explained on this show before if one studies the length of ?time? of trends there are many circumstances were you could know in advance the minimum or maximum length of the trend. I have been indicating for a few months the minimum ?time? for the NIKKEI was the 19th of January. This could be setting up as a possible high point with the small sideways move that has developed. Most highs are set in with a move above ?obvious? resistance that fails so a day or two above this level that fails could set up a correction.
LET?S LOOK AT A GOLD MONTHLY CHART
You have requested that I take a look at gold for your viewers. Gold has moved above the January 1983 high, which put it into a place where this can be qualified as a runaway market. You can see at the beginning of the chart the 1976 through 1980 bull campaign. I have placed an arrow at the point where this trend has become very similar to our current trend. The trend of the 1970?s blew off into that huge move up in 1980 that took 3 years 21 weeks. This current trend is now 4 years 42 weeks. So this is without a doubt in the exhaustive phase of this trend. The last exhaustion move within this trend was obvious but was only a 36-day run and they are usually longer, at least 60 or 90 days. In 1980 the final exhaustive move up was 80 days. All I can do at this point is notify you when the trend appears to have exhausted. I have had three dates that could end this trend one is today, then 2nd of February and that looks like tough resistance in ?time.? Then March 21st to 28th but I will be quite surprised if it can carry that far in time ? this is an exhaustion style of trend. Markets have been doing this style of trend since the beginning of trading ? so make no mistake this trend is exhausting. It can exhaust and consolidate for 30 days and put on one more exhaustion leg up but I will be able to identify that circumstance if it occurs. In 1979 price exhausted and consolidated for 30 days and was followed by the final vertical move up that lasted 80 days and doubled the price. I don?t believe that circumstance will repeat at this time.Next week we'll look at the weekly chart.
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.
