With the FTSE I must admit that I have had to revise my count to reflect the Dow Jones. Previously I had the FTSE labelled as a 1-2-3 down, with this recent bear market rally expected as a wave 4. It hasn’t played out the way I expected (although it’s still a possibility), I expected the market to fall away more impulsively than it actually did. Having looked at it again, I am now using what was my alternative count.
FTSE like the Dow Jones has seen an (a)-(b)-(c) decline to make a large wave (A) (again apologies for not being to label the big A). The recent bear market rally is an (a)-(b)-(c) structured wave (B). This view reflects the price action on the Dow Jones better. FTSE and the Dow Jones have historically tended to move in unison, as with other European markets.
Looking at the Fibonacci retracement levels, FTSE has found some resistance at 4720, at the 61.8% level. I suspect that it could start to make a small correction here before more upside to make a 5 up wave (c) of (B). Also notice the slight cluster of the (a) of (B) Fib. Projection and the (A) 50% retracement level (again much like the Dow Jones) between 5110 and 5190. This could be a likely target for wave (B) to terminate before the market falls away again to take out the March 2009 lows and go lower still.
The FTSE MACD is a lot more compressed than the Dow, giving the FTSE less room for manoeuvre, but none the less keep an eye on this indicator, it can prove a useful early sign of a wave (B) top. If it breaks down below its support line the market would look quite a bit more bearish and might not have enough momentum to reach 5110.
Short Trend: Down? (corrective)
Medium Trend: Up
Long Trend: Down
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1 comments:
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