Tag Archives: ftse technical analysis

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
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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
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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 – 10th May, 2016

FTSE breached the channel confirming a trend change. Thereafter, it continued lower as expected.

Summary: FTSE may have just begun a second wave correction. It may end in a few days about 6,279. But look out for surprises to the downside because it is possible it may end more quickly. The target remains at 3,796.

MONTHLY ELLIOTT WAVE COUNT

FTSE monthly 2016
Click chart to enlarge.

At the monthly chart level, FTSE is the clearest bear market.

The cyan trend line is drawn across the two major swing lows in the bull market which began on March 2009. This bull market trend line has been breached by a close well over 3% of market value, indicating a trend change from bull to bear.

The 200 day moving average is now declining (shown on the technical analysis daily chart at the end of analysis). Price has made a series of lower lows and lower highs. FTSE is in a bear market until proven otherwise.

From an Elliott Wave perspective, the downwards movement labelled intermediate wave (1) to the low in February 2016 has well overlapped back into the high labelled primary wave A of February 2011. This downwards movement may not be a fourth wave correction within an impulse unfolding upwards. So the prior wave up labelled cycle wave X or b must be over and it must be a three wave structure.

The cyan bull market trend line has provided resistance.

Super Cycle wave (II) is seen as either a large flat correction, a double flat or a double combination.

If Super Cycle wave (II) is a large flat, then within it cycle wave a was a regular flat and cycle wave b was a zigzag and 1.05 the length of cycle wave a. The length of cycle wave b indicates the most common type of flat, an expanded flat, may be unfolding. Cycle wave c downwards must subdivide as a five wave structure. Cycle wave c would be expected to end substantially below the end of cycle wave a at 3,460. At 1,477 cycle wave c would reach 1.618 the length of cycle wave a.

If Super Cycle wave (II) is a double flat, then the first flat in the double was a regular flat labelled cycle wave w. The double is joined by a three in the opposite direction, a zigzag labelled cycle wave x. Now a second flat correction should unfold sideways for cycle wave y. Cycle wave y would look similar to cycle wave w, with two large market crashes within it. It should end about the same level as cycle wave w at 3,460, so that the whole movement is a sideways structure.

If Super Cycle wave (II) is a double combination, then the second structure in the double for cycle wave y may be either a zigzag or a triangle. Either of these should reach down only to about the same level as cycle wave w at 3,460, so that the whole structure has a sideways look to it.

Of all these three options the simple expanded flat labelled cycle waves a-b-c is the most likely because expanded flats are very common structures.

WEEKLY ELLIOTT WAVE COUNT

FTSE weekly 2016
Click chart to enlarge.

Intermediate wave (1) subdivides as an impulse. Intermediate wave (2) is subdividing as a zigzag. Only when the small blue channel about this zigzag is breached to the downside may confidence be had that it is over.

Intermediate wave (2) may not move beyond the start of intermediate wave (1) above 7,122.7.

DAILY ELLIOTT WAVE COUNT

FTSE daily 2016
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A five down looks fairly clear for FTSE. This should be expected to be followed by a three up. Minor wave 2 would most likely end about the 0.618 Fibonacci ratio. It may last a few more days.

However, technically it may also be over. It would be relatively brief and shallow though at only 0.342 of minor wave 1 and lasting only two days. It is possible it may be over but looks more likely it will continue higher.

The first target for intermediate wave (3) is at 3,796 where it would reach 1.618 the length of intermediate wave (1). If price gets to the first target and the structure is incomplete, or if price keeps falling through the first target, then the second target would be used. At 2,172 intermediate wave (3) would reach 2.618 the length of intermediate wave (1).

Intermediate wave (3) must make a new low below the end of intermediate wave (1) at 5,499.51.

TECHNICAL ANALYSIS

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

Neither Google / Yahoo data feed nor StockCharts provide volume data for FTSE. Comments on volume are taken from Yahoo Finance data.

The rise in price for 10th May comes on lighter volume. The rise in price is not supported by volume. This supports the Elliott wave count.

At the low, the candlestick for 6th May completes a hammer. Now the 9th and 10th of May complete a bullish engulfing pattern. This indicates a trend change but does not indicate how high the next wave may go.

Price is finding some resistance at the 200 day moving average.

ADX is increasing indicating the market is trending downwards. ATR is still declining indicating a trend has not yet started, or that there is something wrong with this downwards trend so far.

RSI is neutral. There is room for price to rise or fall. There was slight divergence between RSI at the low of the 6th May and the low of 4th May. This indicates some upwards movement which is unfolding.

Stochastics is returning from oversold.

This analysis is published @ 04:02 a.m. EST on 11th May, 2016.

FTSE Elliott Wave Technical Analysis – 23rd March, 2016

Summary: FTSE remains in a bear market: lower highs, lower lows, 200 day moving average still pointing lower, and price below the bear market trend line.

WEEKLY ELLIOTT WAVE COUNT

FTSE weekly 2016
Click chart to enlarge.

DAILY ELLIOTT WAVE COUNT

FTSE daily 2016
Click chart to enlarge.

The structure of intermediate wave (2) still needs at least one more small final wave up to complete a corrective count of seven.

Redraw the channel if minor wave B moves lower. After a new high a subsequent break below the lower edge of the channel would indicate a trend change.

Intermediate wave (2) is still most likely to end about the 0.618 Fibonacci ratio at 6,453.

TECHNICAL ANALYSIS

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

Comments on volume use data from Yahoo Finance as StockCharts do not provide volume data for FTSE.

Downwards days continue to be stronger than upwards days for FTSE. The volume profile is still more bearish than bullish.

As price moves essentially sideways, volume is overall slightly declining. Price may find some resistance at the 200 day moving average.

Price is range bound between the 200 day average and the red horizontal support line at 6,035. A breakout above or below on a day with increased volume is required before the next trend direction can be known for FTSE. Volume favours a downwards breakout which supports the Elliot wave count.

RSI is not yet extreme. There is room for price to rise.

This analysis is published @ 11:03 p.m. EST.