First an apology for that awful call on Copper.

LET'S TAKE A LOOK AT THE S&P 500 INDEX

There is one thing that we can have a lot of confidence in related to most stock indexes and that is the last low was an "EXHAUSTION." Only two things are going to occur in the next few weeks. The index is going to struggle down against the exhaustion low and produce a higher low and rally. Or the index will marginally break that low and rally. The nature of that rally will tell want the next 12 months will look like. My forecast has called for a first quarter low and a significant rally and nothing has occurred to change that forecast. The chart is a daily chart and I have drawn the probabilities on the chart. The first one the probability that the last little three day base was the higher low and the index will now show a trend up for at least 45 calendar days. If there is no follow through to yesterdays rally then that will not be case. The rally has to exceed three days to have a chance. Then the two other probabilities are either a further struggle down as indicated by the dash line and resolve into a higher low in the next week or two. Or a marginal new low that will not to go very much below the January low. The maximum could be 1230 but will recover very quickly-only a multi-day break. Then the rally should run a minimum or 45 calendar days and would be a fast trend up.

The nature of the up trend following the low be it a higher low or a marginal break will determine the probabilities for market for the next year. There are three or four probabilities that exist for that rally and some very specific cycles for the length of time which we'll discuss as the rally progresses. That low is January was a true exhaustion and the probabilities following such an exhaustion or capitulation of sellers are very strong for only a marginal break or higher low. Another leg down, without a significant period or time expiring first, is very remote.

There was a time cycle for low at 120 days from high and a little three day base pattern. But yesterday's trading was not impressive with the afternoon fade so I need further evidence to convince me this was the higher low. I really like the other two probabilities better as they will be easier to see complete.

So as I've been saying since January this move down is complete or 95% complete it is just a matter of how this next low materializes. This appears to be true of all the European stock indexes also.

LET'S LOOK AT THE FTSE 100

There is one thing that makes it a possibility for further downside testing and that is the distance between the current support and the exhaustion low. That "space" is a very bullish picture indicating support at a very high level. It could be too bullish a picture to be real and I'd like to see some further downside testing to set up the low. But there are two lows above the exhaustion and this leg could be complete or close to complete. The same circumstance as the US stock index.