Stock Market: CNBC Report
LETS LOOK AT THE FTSE 100 DAILY CHARTS
Last week I thought the trend still looked healthy and the congestion that we were witnessing was normal as the index approached the "obvious" price resistance of the old high. How markets behave at the "obvious" is always enlightening. I indicated as long as the index held to a one-day counter trend or in other words a one day sell off and recovered; it would move to the same distance above the high that it just went below the high or above the 5550 price zone.
LET'S TAKE A LOOK AT THE S&P 500 DAILY CHART
I have been forecasting this current move up has the probability to break away and create a fast trend up. Last week I forecast the index would correct when it approached the "obvious" resistance of the old high. But that correction would be a first-degree counter trend of one to four days. On the McLaren Report I indicated the move down would start with a wide range day followed by two consecutively smaller range days would produce a low on the third day down above the 50% mark. That is what has occurred. Now of course it needs to continue the move up and get back above those highs this week or there could be a problem with the up trend. This trend needs to hold the criteria for a fast trend or there could be a problem with the trend.
NOW LET'S LOOK AT THE DAILY CHART OF CRUDE OIL
Last week crude oil had come down to the "obvious" support. I indicated we would see a rally up off the "obvious." If that rally was a first-degree counter trend of one or two days that goes to a new low in the same or less time, it would indicate the trend was down as we would have evidence of trending. The rally was two day and a new low was hit the next day and was exactly what I indicated would occur if the trend were down. Since the market did close on the low it is critical the market move lower or it will appear as though a capitulation low of some sort had just occurred. If bearish you don't want to see a little false break pattern here. Remember our rules about closing on the high or low for the day. If we see some follow through to the "close on the low day" it will look like the market is going down to the highs of March/April.
Last week the index had created a spike on the 6 th day up in both directions and was trading within that range. I indicated if it could hold that spike low within four days it would be bullish. The fourth day did go marginally lower, the 5 th day moved lower and rallied. The sixth day was a very weak rally and the 7 th day or Friday was down with little ability to rally.
So the index went 6-days up and is now 7-days down and still well above the low that started the 6-day rally. That is showing some strength but it is also showing an inability to rally. The move down is a struggle compared to the move up (6vs7). It needs to move up today or we could see a wide range day down.
LET'S LOOK AT THE ASX 200 INDEX
Last week I thought the index would churn a bit more before making a run up out of the sideways pattern. It decided not to wait for me and went to a new high Wednesday and extended that move on Friday. Our objective for this move up remains a minimum of 3614. Monday has some cycle resistance that could bring about some multi-day congestion. I am assuming this is the last trend up to finish this bull campaign.
NOW LET'S LOOK AT A NIKKEI MONTHLY CHART
Remember, all highs and lows are exact proportions of previous movements. Those portions are 1/8 th and 1/3 rd and each have very specific meaning or probabilities associated with them. As you know I have been very bullish on this index for this year. The index had come down to a 3/8 retracement, you can see this on the chart. As I explained many times before this retracement is the normal retracement for a bull campaign and holds the up trend intact. It also yields an objective of a 3/8th extension of that same range. The only negative now is the exhaustive nature of this current daily trend and we'll look at that daily trend and the timing for this trend next week Monday.