Stock Market: CNBC Report

By: Bill McLaren | Mon, Jun 5, 2006
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CNBC EUROPE

I thought we'd look at some of the remaining timing for some of the indexes.

LET'S LOOK AT THE FTSE 100 DAILY CHART

Since the high was 180 days low to high the next vibration in time is Tuesday at 45 days from high and if this rally is going to fail, this week is the week it should occur. Last week we looked at the resistance levels and determined 5816 and 5896 where key prices to keep the trend down. A move above 5884 to 5896 would be moving far enough into the range down to eliminate an immediate bear trend but would indicate a probable start of a sideways distribution pattern forming.

The chart below is the time cycle of one year broken into 1/8th and 1/3rd just as we break price ranges into 1/8th and 1/3rd. So this week there is the 5/8th increment of one year and with the 180-degree high, if the trend is down this could be the cycle for a lower high. Please understand we don't know if the trend is down, initially I have to assume this rally is the beginning of a distribution pattern or sideways move now. In other words if this is a top a period of distribution is the highest probability.

LET'S LOOK AT THE S&P 500 INDEX

The chart below is the 90-day cycle that brought in the high as forecast. The next closest timing is 30 days from high or 120 from low. Unfortunately once there is a completion of the trend on one of our cycles it doesn't mean the cycle increments will continue. But we must assume that until it proves differently. The next 30 day increment is Wednesday and if the vibration continues that will be the next short term turning point. After that the next and extremely important time period is 135 days from low on the 22nd of June. If these stock indexes are going to trend down that will be the next important high.

DOLLAR INDEX

I don't see any reason to change my forecast the dollar is resuming the fast trend down. The rally on Thursday was that nasty game called "run the stops." I previously pointed out because of the huge space between the previous support and this rally some consolidation was necessary before the trend could resume and that has occurred. If the market doesn't start to trade below the lows this week then I am likely wrong. The low in Gold was at 3/8th of the last range up and is a price level that can hold that up trend intact and will usually bring in a rally even if the trend is down. But if I'm correct on the Dollar then the rally in gold should continue this week.

CNBC ASIA

LET'S LOOK AT THE NIKKEI AND THE TIMING FOR THE PAST FEW MONTHS

The vertical lines are 45 calendar day increments (1/8 of 365) and you can see the index went 90 days low to low and was followed by 90 and 180-calendar days into high as occurred with many world stock indexes. You can see the next 45 increment is now and if valid is a low for a rally of some sort but whether that restarts the bull trend is doubtful at this point it is possible but little in the way of evidence. You can see there have been three little thrust down that could not get legs so there is also something of a technical nature on the chart that could present a low for a rally. Looks like a rally but I can't qualify the strength of the rally should be at least 4 days.

LET'S LOOK AT THE ALL ORDINARIES AUSTRALIAN STOCK INDEX

Last week we looked at how the index had come down to support that could hold the uptrend intact. That support was 3/8 of the last major range. Technically there are two important prices to watch. The first is the ¼ mark on the chart of a price between 5084 and 5094. If the index cannot get above that level within the next two days it could represent a weak move up and would keep the move down in a strong position. Then the last low before the final high is always important and is the midpoint of the move down. That is the critical resistance. A move above 5146 would indicate a lack of downside pressure and indicate a sideways pattern or a resumption of the up trend, although a sideways distribution pattern is more probable.

GOLD

Gold came down to 3/8 of it last range up and found support. The same support level found in most stock indexes this past month. Holding that level indicates a rally of some sort. As we've discussed may times the 3/8 level will hold the up trend intact. But there will usually be a rally from this level even if the trend were down. We know this last up leg is complete. Remember our theory that important highs and lows will become 50% marks into the future, you can see that occurred in this instance. I need to see the first few days of this rally before issuing a forecast but I do believe my dollar forecast for a resumption of the bear trend is still in place and should have a positive effect on gold. But I'd look for a rally this week, exceeding 4 days is the first indication of resuming the trend.

 


 

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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