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LET'S LOOK AT THE FTSE DAILY CHART

There has been a swift reaction to the cycles I have been laying out for the past two months. I said the 19^th for a top in this index so I was 3 days off. The question for the day - is this a complete bull campaign? This was high was a calculated resistance level at a ¼ extension of the previous range. But I thought the index would get to between 5850 and 5920 for a top or one more drive up. You can see after the high there was a lower high that was a 4 day rally. Remember how first degree counter trends are one to four days, and there is a 4 day move that actually is a test of lower resistance or distribution. So we could conclude the first rally off the high was a counter trend. So there is some evidence of trending down. Now we could see another lower high and that should produce a capitulation style low this week. Support for this trend is obvious at the horizontal line coming from the previous high. Support to hold the trend in a strong position is ¼ retracement at 5600. If it drops below 5520 or 3/8^th of the range up, there may be a bigger problem with the intermediate term uptrend. Last week we looked at the weekly chart and that trendline that has been in existence since 2004. That trendline should not even get close to being tested if it is going to hold the uptrend. There needs to be a higher low versus the October low above the trendline. If this move down retraces deeply into this last range, the up trend is going to be suspect.

LET'S LOOK AT THE S&P 500 INDEX DAILY CHART

The S&P went up into the 11^th and turned down as I had forecast months ago. This market runs in 90-day blocks of "time." Many trends end with a 90-day block of time just as this has occurred. Not only this index but many commodities and stocks run the same cycles. So the index exhausted this leg on a 90-calendar day cycle as forecast. My forecast indicates this will be a shallow correction and the trend will resume either on the 3^rd or the 10^th of February. Friday's low was a ¼ retracement of the move up but when this type of move shows up in this index, the low needs to be proven and will usually be established and then tested in some way.

LET'S LOOK AT A S&P WEEKLY CHART

You can see the trendline. If my forecast for one more leg up that will be an exhaustive style of leg up is true, then that trendline should not even be tested. There needs to be a higher low above that trendline and above 1229. A move below that level will set up a probability the intermediate term up trend is complete and the final leg up I have been forecasting will not occur. So this is an extremely important correction for the intermediate term trend. As you know I forecast this correction and the date the up trend will resume. The parameters are clear this move down should not be deep and not last past the 10^th of February.

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LET'S LOOK AT THE NIKKEI DAILY CHART

I have been say for months the trend would end by the 19^th of January and the high came a few days early. This same cycle was running out in most stock indexes starting with the US market on the 11^th. As you can see I have had this leg up titled an exhaustion leg due to the pattern of three ascending trendlines. Now that it has exhausted as forecast, the question becomes did this exhaust the entire bull campaign? That will take me a few more weeks to determine, but there are some probabilities that are normal for this circumstance. Last Thursday left an island reversal that failed as a low Friday indicating more selling to come. The index could get a bounce from the ¼ retracement but the correction should go to the zone of a 1/3^rd to 3/8^th retracement. If there is going to be another leg up, that level needs to hold. Even if the trend is down there should be a bounce from that price level at 1440 to 1460. I need to see where the first level of support materializes then I can determine if the first rally is a resumption of the trend or a counter trend. And that will allow me to give another forecast. That will be weeks away.

LET'S LOOK AT CRUDE OIL

Last time we looked at this market a month ago I indicated the trend was not down because of the nature of the trend down and the 90-day time period it took to go down. The worst case was a sideways pattern the best was another leg up. You can see on the weekly chart the correction stayed on top of the previous high and this pattern offers a projection of $76 or $82 for price and Feb 18^th or 28^th as targets in "Time." This current rally is strong and could be a new leg up. Those prices are for the June Contract.

LET'S LOOK AT GOLD DAILY CHART

Last week we looked at the Monthly Chart in Gold and showed the index was in an exhaustion style of move or vertical style of trend that will go on until it exhausts. This daily chart shows the exhaustion leg that is a third ascending trendline. You can see there is some congestion as the market has gone to new highs and pulled back below the break out price on two occasions. If that occurs for a third time there maybe a correction to follow but for now it looks like the next resistance in time is between the 2^nd and 8^th of February. Congestion of this type if the trend resumes will be approximately the mid point of the leg. At this point a price objective would be a guess for me. And the best I can offer is the trend will be at risk if it goes up into the 2^nd through 8^th of February. We'll need to see how the index goes up into that time window and see if the pattern of trend presents a risk.