LET'S LOOK AT THE FTSE DAILY CHART
The FTSE has developed the pattern I drew last week on the chart. It has rallied three days and not moved above the swing high. This leaves this vulnerable to a run down to one of the previous lows, even the July low. But it must go to a new low within two days or it probably isn't going down. This was a weak trend up and weak trends are usually followed by fast trends so there is reason for caution if you're on the long side. If this doesn't break the low and Monday turns into a higher low that can set up a rally into the end of October to Nov 4th but first it needs to hold. And because of the weak nature of this three month rally one needs to be vary cautious if the next two days are down and move below the last swing low there could be a fast trend down. If a higher low develops now and there is no evidence of that yet. But if it occurs and Monday proves to be an important low this will lock in, in "time" vibrations on September 29 and October 17 and a completion of the move by November 4th. That would be the bullish scenario from this point if this develops a higher low. But for now this is a weak trend up and there may be a lower high developing and if a valid lower high there will be at a new swing low by Tuesday and a fast trend down.
LET'S LOOK AT THE S&P DAILY CHART
We have been comparing these two trends as they have been developing and we've seen how the S&P 500 has been a much stronger trend. The NASDAQ Comp has hit the objective I had posted for this rally. The S&P is within a few points of the obvious old high and a possible stopping point for this rally, so a top is possible. I would prefer to see a few more days of distribution which would be a few more day of congestion. But a lot of stocks that were running appear they could have exhausted on Friday so I believe a top is possible.
My usual methodology is to look at the chart and ask myself what is the last thing on the chart? The last thing on this chart is a marginal new high following a 4 day counter trend move down. Remember 4 days down and a new high within two days is a strong showing. The next "thing" on the chart before that is a higher double bottom and is another bullish pattern. Remember, the direction of the trend indicates the importance of the pattern. Double bottoms in up trends are meaningful, while double bottoms in downtrends have a very high probability of failure. But even in view of the higher double bottom and the counter trend of first degree (one to four days). I still believe there is a chance this trend may have exhausted or will do so the first few days of this week, if there is only a small advance. Something that would look more like congestion that an advance. So they either roll them over this week or we could see this extend to a 1/8 or ¼ advance of this range down or around 1340. But for we are looking for evidence this has just exhausted.
Due to my travel and airport delays I am unable to supply you with the Asian Report - Sorry. There will be one posted next week.