LET?S LOOK AT THE FTSE DAILY CHART

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The correction was 10 days down and within 4 days the index was at a new high as were most European stock indexes.˜ Four days up to retrace the entire 10-day move down is a sign of strength and should indicate higher prices. The support to hold the trend in a strong position for the next rally was 5600 and the low was 5610.˜ If my published target 5850 to 5920 is accurate it would only end this rally. There could be another leg after this completes. Please understand I don?t know at this time.˜ It does depend upon how strong this run up is the next two weeks.˜ The move down in 10 days retraced less than ª of the range up and leaves a minimum projection of a ª extension of that range and is around 5900.˜ If we take extensions of larger ranges the price gets closer to 6000.˜ But for now we will assume this current drive is an exhaustion of this leg and could run as long as either 22 or 30 calendar days and see a minimum price of 5900.

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

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My forecast called for this correction but it also indicated the trend would not resume until either the third or tenth of February.˜ The support level has been a ª retracement of the range and holds the trend intact and in an extremely strong position for the next rally IF that small a retracment is valid.˜ My forecast called for the support to be retested before resuming the trend on either the 3^rd or 10^th of February.˜ Remember the forecast calls for the next leg up to be vertical and exhaust the entire bull campaign that started over three years ago.˜

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THE NEXT CHART IS THE 2006 FORECAST

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You can see the high on the 11^th occurred as forecast as has the first decline only being minimal in price retracement.˜ Now we need to see the successful test of that support and another drive up starting on either the 3^rd or the 10^th to confirm the last leg up and my forecast.˜ The last low was a marginal ?false break? so there has been a test of support so I could be in error looking for another successful test but I?d still prefer to see a move down of some sort before resuming the trend.˜˜˜˜˜˜˜

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CNBC ASIA

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LET?S LOOK AT THE NIKKEI DAILY CHART

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Last week we looked at how the move down was marginally less than a ª retracement of the entire bull campaign.˜ The chart today shows the correction was also only 3/8ths of the last leg up.˜ The 3/8^th and ª correction keep the trend intact and leaves a minimum movement to the 1785 price level.˜ And since this is a qualified blowoff trend as you can see by the ascending trendlines.˜ There are only two probabilities for the future of this trend.˜ If this is another leg up it will be as fast or faster than the previous leg up. Or the index will advance another week and go into an upward tilting sideways pattern for the next three months and produce a top.˜ Since this correction was only 8 days down and a new high was 4 days latter there is an obvious sign of strength on the chart but since the last two days were a majority of the move the index will need to consolidate those last two days with some congestion this week.˜ As far as I can see those are the only two alternatives to the future of this trend.

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LET?S LOOK AT THE ALL ORDS WEEKLY CHART

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Last week in response to a question I said the All Ords Australian stock index had one more drive left to this leg up.˜ Last week was a 142-point weekly range and that is getting exhaustive in its size.˜ But you can see that big range came off a low price you can also see how the trendlines are continuing to accelerate and are confirming the exhaustion style of trend as indicated by the arrows. This means that each phase of the advance will be as fast or faster than the previous until it is complete.˜ All uptrends tend to move in 5-wave structure or what is commonly known as Elliott wave analysis. This analysis is never anywhere as easy as it appears since waves can subdivide into 5 wave structures and that becomes very difficult to interpret unless done in hindsight.˜ In this instance it was easy to see there was still one more advance remaining.

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NOW LET?S LOOK AT A MONTHLY CHART OF THE ALL ORDS

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The support and resistance lines on this chart have caught 95% off all highs and lows for the past 25 years and you can see it is now up to resistance that has been forecast.˜ The next resistance is 240 points higher with some difficulty possibly at approximately 120 points higher.˜ So if it isn?t a high at this point in price and time and that doesn?t appear likely ? then it is possible to see another 240 points higher.˜ There is nothing on the charts to indicate top as of Friday other than an unusually strong week.˜˜˜˜˜˜˜˜˜˜

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Last week we looked at Gold I indicated another little marginal new high that fails would indicate a correction and that hasn?t occurred and Crude showed a small island exhaustion but the move down is still within the confines of a counter trend down so no change in that market either.˜ There is also no change to the HANG SENG forecast.˜˜˜˜˜

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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.