LET'S LOOK AT THE HANG SENG MONTHLY CHART FIRST

You can see the index has been struggling against the 1999 to 2000 bull market top. There would, obviously, be a lot of supply at that price zone.

NOW LET'S LOOK AT THE DAILY HANG SENG CHART

As I've been say this trend is complete the index is now in a sideways consolidation. Whether this sideways moves turns into a top or a consolidation of the up trend to allow for another leg up I can't yet forecast. But this last leg up, that started in May, is complete. You can see there was a 7 day move down followed by an 11 day struggle back up to complete the trend. The last rally ended with an Island exhaustion pattern. So there have been two attempts at the high and one at the low. This last move down has shown another big gap down last week. If it can show a big gap back up and appear like it exhausted down, it could give a bullish appearance. But it would be normal to test those January lows and then the truth will be known. If the rally from that price level measures as a counter trend, there may be a bear campaign. If not, then a test of the high will follow. While in a sideways pattern, the third test of support or resistance is the dangerous one as that can fail and start a trend. The fourth test of the support or resistance zone has a high probability of going through and establishing another trend. But as I've been saying for the past few weeks this index is no longer trending. Our job is to monitor this index and see when it is going to start to trend again. There are cycles for low on Tuesday but the index is not at any interesting price level or pattern. So I'm assuming only something minor in nature.

LET'S LOOK AT THE AUSTRALIAN ASX 200 INDEX

Last week it looked as though it may hold together if it could recover the trendline and it fell 143 points in three days. That exceeded all the previous declines in this bull trend except the October/ November decline and that was 153 point but took 30 day. I've been saying this is an exhaustion phase of a bull trend and when this leg is complete we can assume a completion of the entire bull campaign. The only question left to answer is will there be a distribution pattern of some sort?. Or, maybe better said, will there be a volatile sideways pattern of distribution before establishing a down trend? You can see how the last rally of 6 days was by far weaker than any rally off any of the previous lows. This should find support at or in between those two horizontal lines I've drawn on the chart.

It also appears as though the Australian $ has topped versus the US$. The last rally in the Australian Dollar was too weak to assume a quick recovery.

NOW A QUICK LOOK AT THE TOPIX INDEX REPRESENTING THE JAPANESE STOCK INDEXES.

Last week it had done 4 down days at obvious resistance and within one day it was back at the high. It then failed at a new high and is now consolidating. I thought it was going straight up to the April highs last week. This failure is not unusual considering the vertical move it was in getting back to this price level. But anytime there is a new high that fails, one needs to be cautious until the trend resumes. I still believe in this uptrend.