Category Archives: FTSE Historical

FTSE Elliott Wave Technical Analysis – 24th April, 2017

FTSE is either ending a minor degree pullback or has had a major trend change. Classic analysis will be used to evaluate which scenario is more likely and at which price point one would be confirmed and the other discarded.

Summary: A pullback may be over here or very soon for FTSE. Assume the trend remains the same, up, until proven otherwise. This would be in some doubt only if price moves below 6,997.25.

Changes to prior analysis for FTSE are in bold.

MONTHLY ELLIOTT WAVE COUNT

FTSE monthly 2017
Click chart to enlarge.

For clarity only one monthly chart will be presented in this analysis. The alternate I have updated does not diverge in expected direction, so at this time it adds no depth to the analysis.

FTSE may be still within a large Super Cycle wave (II) unfolding as an expanded flat correction. These are very common structures.

Cycle wave a subdivides as a simple zigzag.

Cycle wave b may be unfolding as a double zigzag. These are also common structures for B waves.

Within the double zigzag, the second zigzag labelled primary wave Y is either complete or requires another upwards wave to complete it. These two possibilities are separated in the daily charts below.

The normal range of B waves within flats is from 1 to 1.38 the length of their respective A waves, giving a normal range for cycle wave b to end from 6,951 to 8,318. Price has reached up to within this range now.

When cycle wave b reaches 2 times the length of cycle wave a at 10,624, then the idea of an expanded flat should be discarded based upon a very low probability.

A new major swing low below 5,499.51 should be seen for Dow Theory to indicate a trend change.

WEEKLY ELLIOTT WAVE COUNT

FTSE weekly 2017
Click chart to enlarge.

This weekly chart shows the structure of intermediate waves (B) and (C) within primary wave Y.

Within minor wave 5, no second wave correction may move beyond the start of its first wave below 6,676.56. Downwards movement should now find strong support though at the lower edge of the blue Elliott channel if this wave count is correct.

DAILY ELLIOTT WAVE COUNT

FTSE daily 2017
Click chart to enlarge.

Always assume the trend remains the same until proven otherwise. Assume FTSE is still within a bull market until price proves it is not.

There is a problem with this first daily wave count: the possible ending contracting diagonal of minuette wave (v) to end minute wave iii meets all Elliott wave rules regarding wave lengths, but it does not look right. First, at their end, contracting diagonals normally have a small overshoot of the (i)-(iii) trend line but there is no overshoot. Second, the trend lines should converge but these do not; they actually diverge very slightly, which is technically a violation of the Elliott wave rule.

This wave count is published with this acknowledgement. This should reduce its probability. It is published only because at this stage I have not been able to see a resolution to this bullish wave count, and the alternate is so bearish. That does not mean a resolution is not possible.

Minute wave iv may not move into minute wave i price territory below 6,997.25.

ALTERNATE DAILY ELLIOTT WAVE COUNT

FTSE daily 2017
Click chart to enlarge.

It is possible at this stage to see the entire structure of cycle wave b complete. The problem with the ending diagonal seen in the main wave count is here neatly resolved.

A new trend at cycle degree should begin with a clear five down on the daily chart. This has not completed yet. This wave count should not be given serious weight until it has proven itself.

To prove itself these conditions should be met:

– A five down on the daily chart

– A new low below 6,997.25

– A breach of the bull market support line on the monthly technical analysis chart below

– A new low below 5,499.51

Cycle wave c should last one to several years. It would be extremely likely to make a reasonable new low below 3,277.5. An initial target about 1,537 would see cycle wave c reach 1.618 the length of cycle wave a, the most common Fibonacci ratio for C waves within expanded flats.

TECHNICAL ANALYSIS

MONTHLY CHART

FTSE monthly 2016
Click chart to enlarge. Chart courtesy of StockCharts.com.

Expect the blue bull market line to offer final support while price remains above it. If this line is breached, expect a trend change from bull to bear.

Moving averages are bullish. This pullback is resolving ADX reaching extreme. There is again room for a trend to develop.

Long term RSI bearish divergence is concerning for bulls.

WEEKLY CHART

FTSE weekly 2016
Click chart to enlarge. Chart courtesy of StockCharts.com.

A mid term pullback within the larger bull market is indicated by a breach of the mid term bull trend line.

The prior upwards trend showed weakness in declining ATR, but did not reach extreme as ADX remained below 35 and below both directional lines.

DAILY CHART

FTSE daily 2016
Click chart to enlarge. Chart courtesy of StockCharts.com.

With RSI now just reaching oversold and price very close to support, it would be reasonable to expect either a bounce, at least, or fairly likely an end to this pullback here. This supports the main daily Elliott wave count.

RSI and Stochastics do not always exhibit divergence with price at lows, but they very often exhibit divergence with price at highs.

This analysis is published @ 03:26 a.m. EST.

FTSE Elliott Wave Technical Analysis – 16th February, 2016

Downwards movement for FTSE continues as expected.

Upwards corrections remain within the base channel as expected.

Summary: There may now be five overlapping first and second waves for FTSE. This indicates an explosive downwards movement may be ahead. The mid term target remains the same at 4,296. The risk is at 6,115.10, or the upper edge of the green channel on the daily chart. The Elliott wave count is supported by technical analysis.

To see monthly and weekly charts and the bigger picture see last analysis here.

New updates to this analysis are in bold.

WEEKLY WAVE COUNT

FTSE weekly 2014
Click chart to enlarge.

From the all time high in April 2015, FTSE has a five down and a three up. This current fall should move well below the end of intermediate wave (1) at 5,768.22 and then remain below that point. Intermediate wave (3) must move beyond the end of intermediate wave (1), far enough below to allow room for a subsequent fourth wave which may not move back into intermediate wave (1) price territory.

Price has now made a new low below the August low at 5,768.22. Downwards movement should continue.

DAILY WAVE COUNT

FTSE daily 2014
Click chart to enlarge.

So far the middle of the third wave cannot have passed for FTSE. Upwards movement labelled minuette wave (ii) is back in minute wave i price territory. This cannot be minute wave iv, so it may only be yet another second wave correction if this wave count is correct.

Intermediate wave (2) lasted 42 days. Minor wave 2 lasted 11 days. Minute wave ii lasted 9 days. Each subsequent second wave is shorter in duration than its predecessor giving the wave count the right look. None of these waves are exhibiting Fibonacci durations.

Minuette wave (ii) may have completed in a Fibonacci 8 days total, reaching a little above the 0.618 Fibonacci ratio. A lower degree second wave correction should not breach a base channel drawn about a first and second wave one or more degrees higher.

Within minuette wave (iii), yet another first and second wave may be complete for subminuette waves i and ii. Again, subminuette wave ii is in the price territory of the first wave one degree higher, so this upwards movement may not be minuette wave (iv). If this wave count is correct, then this may only be yet another second wave correction.

Subminuette wave ii has reached up to the 0.618 Fibonacci ratio of subminuette wave i which is about 5,872. It would be very likely to end here. If it does end here, then it would have taken a Fibonacci three days duration. The pattern of each successive second wave correction being more brief than its predecessor should be expected to continue.

If subminuette wave ii continues any higher, then it should find resistance at the upper edge of the base channel drawn about minuette waves (i) and (ii), one degree higher.

So far the lower edge of the base channel is providing support. If price manages to break below this support line, then it would be confirming a big third wave should be underway.

The target for intermediate wave (3) remains the same at 4,296 where it would reach 1.618 the length of intermediate wave (1).

A shorter term target is calculated for minuette wave (iii). At 5,023 it would reach 1.618 the length of minuette wave (i).

If targets are wrong, they may not be low enough.

Of all the indices I follow with Elliott wave counts, FTSE remains the clearest bear.

TECHNICAL ANALYSIS

DAILY CHART

FTSE daily 2015
Click chart to enlarge. Chart courtesy of StockCharts.com.

There is no volume data on either the FXCM feed or StockCharts. Volume analysis is done from Yahoo Finance data.

The volume profile for FTSE continues to be more bearish than bullish. As price fell to the last low of 11th February, it came with some increase in volume. The fall in price was supported by volume. As price rose on 12th and 15th February, it came with declining volume (Yahoo Finance volume data for 16th February is not yet available). This indicates the rise in price was not supported by volume. This supports the Elliott wave count.

The last three daily candlesticks complete a stalled pattern, a variation of three white soldiers. While three white soldiers is a reversal pattern, when the third candlestick is small and follows two tall white candlesticks (here they are green) then it indicates the power of the bulls is weakening. This pattern sometimes precedes a decline. This supports the Elliott wave count.

ADX is declining, so it indicates the market is no longer trending. It does not indicate there has been a trend change though; the -DX line remains above the +DX line, so if the trend returns it should still be down.

ATR is overall still increasing. This indicates the market is still likely trending.

The last three days of upwards movement from price has bought RSI back up to neutral. There is plenty of room for this market to rise or fall.

Stochastics is returning from oversold. There is some divergence between the last two swing lows in price and the corresponding lows on Stochastics: while price made a new low Stochastics made a higher low. This indicates some weakness in price. I have learned the hard way though to not give this divergence between price and Stochastics too much weight. On its own, it is just a weak bullish signal. There is no divergence between the high of 16th February and the last swing high of 1st February; as price made a lower high, so did Stochastics.

This analysis is published @ 10:17 p.m. EST.