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Last analysis on 14th October, 2013 expected more upwards movement for the start of a third wave. The mid term target at 7,406 has not been reached, but the structure is still incomplete.

Click on the charts below to enlarge.

FTSE Elliott Wave Chart 2013

Within intermediate wave (4) it is possible to see this structure as a completed zigzag.

The following upwards movement for minor wave 1 of intermediate wave (5) is ambiguous. It can be seen as either a three or a five. This wave count sees it as a five.

Downwards movement for minor wave 2 is now a complete double zigzag. The second zigzag in the double made only a slight new low below the first, but did move price lower.

At 7,406 minor wave 3 would reach 1.618 the length of minor wave 1. This target is about 30 trading days or sessions away.

Within minor wave 3 no second wave may move beyond the start of the first wave. This wave count is invalidated with movement below 6,316.91.

FTSE Elliott Wave Chart 2013

Within minor wave 3 so far minute waves i and now ii should be complete. This wave count expects an increase in upwards momentum over the next one to two weeks.

Minute wave ii is a complete zigzag and very shallow, ending just short of the 0.236 Fibonacci ratio of minute wave i. Within it there is no Fibonacci ratio between minuette waves (a) and (c).

It is possible that minute wave ii may continue lower as a double zigzag, because this first zigzag is so shallow. If price moves below 6,708.52 then I expect this is what would be happening. At that stage I would expect more downwards movement for a few days to either of the 0.382 Fibonacci ratio at 6,628 or the 0.618 Fibonacci ratio at 6,509.

When there is a very clear channel breach of the downwards sloping channel containing minute wave ii, and also a clear five upwards on the hourly chart, then I would have confidence in the short – mid term target at 7,211 for minute wave iii.

While price remains within the channel and there is no clear five up then the possibility of further downwards movement will remain.

If minute wave ii is to continue yet further then it would be either as a flat, double zigzag or combination. All three of these possibilities would require a three wave structure upwards on the hourly chart at this stage.