SPX in exhaustion phase
By: Bill McLaren, CNBC Report, 16 Oct 2006

This chart is a beautiful example of a blowoff trend and is currently in the exhaustion phase of this trend. Last week we looked at how each correction or counter trend move down was less in price and time than the previous. You can also see the lows are not reaching the previously established trend lines. When you can see three ascending trendlines it almost always indicates the final thrust up. If you would look at the NASDAQ 100 or Comp the three ascending trendlines is very clear. Since this is an exhaustion phase of this trend any indication of weakness will start a consolidation or sideways pattern. The first indication this is occurring will be when the index breaks the previous swing high in this instance at 1354 in the S&P 500 Index. Again I don't anticipate a severe correction and could only correct 31 to 36 points but should take 30 or 45 days on the side before the next trend immerges. Right now it looks like there will be one more leg up after this consolidation occurs and that leg will complete the bull campaign.