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

I?ve taken the range from the bear campaign low up to the March high and divided that range into 1/8^th and 1/3rds. The range is highlighted by the arrows. The index retraced a mere ª of that range with a very weak trend down. The pattern of trend down and the ª retracement indicated a ª extension of that range was a very high probability as a minimum price target. The index is currently at the 1/8^th extension and could be some resistance. But the strong probability is the ª extension or the price of 1260 will be hit on this drive up.

NOW LET?S LOOK AT THE DAILY CHART

This is very similar to the situation in January last year. It will either go into an exhaustive style move up or unlike January last year, there could be a small correction. Notice how the volume dropped off during the holiday trading and the index continued to advance. That could leave the index vulnerable to a one to four day move down, 1999 had a similar pattern, but I would not expect the same magnitude of decline that occurred back in 1999 - I?d just look for a multi day move down. If a move down does occur, it should not do any damage to the trend. But there could be some short term vulnerability from this pattern of trend and volume. There is a turning point Tuesday or Wednesday and next cycle expiration is the 23^rd of January and the 12^th of February. A move up into either of those dates could end the short term trend, if the move up is exhaustive in its style of trend. If we do see a correction here, it should not exceed 4 days.

CNBC ASIA

LET?S LOOK AT THE NIKKEI WEEKLY CHART

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We have been looking for the Nikkei 225 index to start a trend since the first week in December. The three thrust pattern, along with the "struggling trend" down, gave an indication to go with the next movement. I also mention the fact that the index had gone one year into high and 6 months into a low at exactly a 1/3^rd retracement. So all it could do in ® the time period of the rally was a 1/3^rd retracement - leaving the index in a strong position for this rally. The next time period that puts the trend at risk is the 23^rd of January.

LET?S LOOK AT THE ALL ORDINARIES AUSTRALIAN INDEX-WEEKLY CHART

Because this is a classic "Blowoff Trend" or "Exhaustion Trend," any loss of momentum will complete the trend. In other words, once the pattern of the trend indicates the last little leg of advance is complete, it could also indicate a completion of the entire bull campaign due to the nature of a "Blowoff Trend." When this occurs there will be a sharp break and either a retest of the high and a distribution pattern or sideways pattern of 90 days. Or this index will trend down for 90 days as a minimum and test either the 1/3^rd to 3/8ths retracement levels of the entire bull campaign. If that occurs there will be a significant bounce off the ª retracement level. But for now the trend is still intact on the weekly chart.

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LET?S LOOK AT THE DAILY ALL ORDS CHART

This index has done little since the start of the holidays. The struggle upward against the overhead trendline on declining volume appears bearish and a sharp one to four day break is possible. But there is no indication it could be the completion of this trend. If the index continues up into Thursday or Friday - then we could see a much more significant break in the advance. I still like the price objective of getting closer to, or marginally above the 4200 price level. That price level is now only 45 points away. The trend is in a position where a break of more than 4 days, could indicate a completion of the entire bull campaign.