Stock Market: CNBC Report

By: Bill McLaren | Tue, Mar 7, 2006
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CNBC EUROPE

LET'S LOOK AT THE FTSE 100

This is the third week of pushing against that overhead trendline, its getting boring. There are some things we can qualify from this "PATTERN OF TREND." You can see where I've drawn the arrows, which indicate the distance between the previous high and where support came in on the correction. The first correction showed support at a very high level above the previous high. The next support was barely above the high but still coming in at a high level. This next correction will break that point for support. For three weeks I've been saying it would hit 5860 and start down or exhaust to 5975 and start down. I'm still waiting.

LET'S LOOK AT THE S&P 500 INDEX

I have explained the past two weeks that the date of the 27th of February was very strong resistance in "TIME" and could be viewed as one would view resistance in "PRICE." That date has held the index from advancing and last Friday the index retested that level and failed. No support has been broken, not even a daily low has been broken the past 3 days so there is no evidence of weakness it is just probability at this point. But I am still looking for this time window to be a high or for the index to selloff into a low on the 13th of March. If the index can push through this resistance it would indicate the final exhaustion leg up is in progress and would run into April, but for now I still believe there is some sort of correction coming from this time window.

LAST WEEK YOU ASKED ABOUT GOLD SO LET'S LOOK AT THE DAILY CHART

Remember this market went into the last high with a third ascending trendline and indicated an exhaustion of some sort. The move up was 90 days, which also indicated an exhaustion and I was able to give you the date of the high well in advance. Now the index has come down 9 days and held 3/8th of the range. That retracement is small and holds the trend in a strong position for this rally. The market is now up 10 days versus the 9 day decline. It stalled a bit last week and could see a few days down starting Monday. But the next important time window is March 21st at the next 45 calendar day vibration. If the market is weak going into that date it could represent a top. If it cannot take out the high in twice the time of the decline (17th March) there is a problem with the uptrend.

CNBC ASIA

LET'S LOOK AT THE TOPIX INDEX THIS WEEK RATHER THAN THE NIKKEI

The pattern of trend is almost the same just a little less volatility. There was an exhaustion move up that was easy to identify, as it was a third ascending trendline. I thought we could see a consolidation take place at a higher level than is occurring. You can see there has been a "false break" pattern, which is a pattern that can represent a top. My forecast called for a consolidation and one more leg up to complete the bull campaign. But we are seeing a consolidation taking place that is developing some negative technical aspects. I am not giving up on this bull campaign. But the NIKKEI has shown a lower high and this index has held the last low. I am assuming these index are both capitulating into a low within the next two days. But I don't like the way these indexes are trading and if the next rally is weak we could see a top form by Mid-April. These indexes are going to show another multi week rally. It could be setting up as the last rally. I just wouldn't be complacent with these indexes as I have been.

LET'S LOOK AT THE AUSTALIAN ALL ORDS INDEX

I believe this index is in a sideways pattern and will find a top around 19th of April. But for now the index is at a resistance in "TIME" and should show a correction of some sort this week. I assume this move down will marginally break the low of the first of March as a minimum. When it gets to that point I'll need to assess the decline.

LET'S LOOK AT THE HANG SENG DAILY CHART

We properly identified the last low in February and indicated the rally would be short lived and would just get marginally above the last high due to the weakness of the uptrend since the December low. I indicated between 16100 and 16200. Since then the index has shown a marginal new high and maybe now showing a lower high. If the last low is broken today, the chart pattern would be showing a one-day counter trend up and thus an indication the up trend was complete. If it holds today and rallies then it should still reach the price objective, which is not much higher. But a lower low below support would be an indication of trending down and due to the relative weakness of this trend since the December low any minor indication the trend is complete would be enough for me.

OIL

You requested I take a look at oil for you. I don't know how much help I can be here. All I can tell you is what I know. When the top came in I indicated the highest probability was for a large sideways pattern rather than a downtrend. Then the manner in which the market trended down was not how you would anticipate a commodity to trend down if it were a bear trend. So oil went down and tested the previous high and ran back up to test the old high and was running down to test the low when this rally has occurred. If it can rally more than 13 trading days or past Wednesday it would indicate a possible uptrend and a completion of that trend on May 18th.


 

Bill McLaren

Author: Bill McLaren

Bill McLaren
McLaren Report

Disclaimer: This message is for educational purposes only and does 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.

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