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Let me first make sure we are all on the same page.˜ As an investor or trader your purpose in this market is to ?find a trend, enter that trend with limited risk and stay with that trend until it becomes at risk of completing.?˜˜ If you?re trading this trend might be on an hourly or even a five-minute chart.˜ If investing it could be viewed on daily and weekly or monthly charts.˜ But the fact is every one should know everything there is to know about trends since that is the name of this investment/trading game.

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LET?S LOOK AT THE S&P WEEKLY CHART FIRST

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I have been saying the index could be approaching a high to the bull campaign.˜ The forecast published Jan 1^st says there is still an exhaustion leg left. But there is now a definite probability from ?Time? and a ?Pattern of Trend? that could end this uptrend.˜ Whenever a market is struggling it is usually followed by a fast move. This fast move could be up or down depending upon how the weak trend is resolved and the size of the trend.

In late 2003, which I have outlined on the chart, the index went into a weak up trend.˜ We can define a weak trend as one that has three thrusts and the corrections against the trend go deeply into the previous swing?so during weak trends the highs and lows overlap. The first example on the chart resolved to the upside with a three-month vertical move up.˜ That fast trend ended with a weak trend at the end of the run that was resolved to the downside.˜ Our current circumstance is a weak trend up. Since it is trading above the last series of highs it is still in a strong position and could be resolved to the upside.˜ But the struggle up is obvious and leaves the index at risk of a fast move down. Last week the index fell 34 points and further weakness could bring about a small panic. IF it can be resolved to the upside it will run up to May 12^th.˜ But for now there is a weak trend up that may be resolving to the downside.˜ If it can hold together this week and not go lower, then we can consider an upside resolution to the weak trend.˜ But for now it is still vulnerable and a lower high on the weekly chart could signal an end to the up trend.˜˜ Understanding the significance of weak trends is a very important aspect of technical analysis and how this weak trend resolves itself will determine the remainder of the bull campaign.˜˜˜˜˜˜˜˜˜˜˜˜˜˜˜˜˜˜˜˜˜˜

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NOW LET?S LOOK AT THE FTSE DAILY CHART

The weekly chart is still very strong but the daily is starting to show some signs of weakness.

You can see the index is also struggling and it appears to be a sideways pattern.˜ But if you look closely at the past 9 days you will see a very small weak up trend that appears to be resolving to the downside. Because it is such a small trend we can?t conclude too much significance to the pattern. BUT if the low of the 12^th gets broken it would indicate trending down but only in the short term, but this would still be trending and leaving the index vulnerable to the larger move down I forecast last week.˜ IF that low is broken today it would indicate the rally was a one-day counter trend and indicate a fast move down for the next few days.

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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.