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Last week’s analysis of FTSE expected more upwards movement to end about 6,695.25. Price moved higher as expected reaching 6,708.17, 12.92 points above the target.

I expect this correction is over and the downwards trend should resume. I am expecting to see an increase in downwards momentum over the next week towards 6,258. This target may be one to two weeks away.

Click on the chart below to enlarge.

FTSE Elliott Wave Chart 2013

Intermediate wave (4) may be completing as a regular flat correction which is reasonably common.

Within the flat minor waves A and B both subdivide as “threes”: minor wave A is a single zigzag and minor wave B is a double zigzag. Minor wave B is a 99% correction of minor wave A.

At 6,015 minor wave C would reach equality in length with minor wave A. It is very likely to make a new low below the end of minor wave A at 6,023.44 to avoid a truncation, although if it is truncated this would still be a regular flat and not a running flat.

Minor wave C may end at the lower edge of the parallel channel drawn about this flat correction.

Intermediate wave (4) may not move into intermediate wave (1) price territory. This wave count is invalidated with movement below 5,989.07.

Minor wave C downwards must subdivide as a five wave structure, either a simple impulse or an ending diagonal. Within it the first wave labeled minute wave i subdivides best on the hourly chart as an impulse, and so minor wave C is most likely to be an impulse. An ending diagonal would require the first wave to subdivide as a zigzag.

Minute wave ii is now likely to be complete ending just above the 0.618 Fibonacci ratio of minute wave i. If minute wave ii is incomplete and extends further then it may not move beyond the start of minute wave i. This wave count is invalidated at minor degree with movement above 6,867.42.

FTSE Elliott Wave Chart 2013

Within minute wave ii the structure is a nicely completed three wave zigzag. Minuette wave (c) is 8.2 points longer than equality with minuette wave (a).

The channel drawn about this zigzag is clearly breached by downwards movement indicating a resumption of the downwards trend. The downwards movement subdivides perfectly as a five wave impulse, with an extended third wave. This is further indication that minute wave ii is most likely over and minute wave iii has most likely begun.

At 6,258 minute wave iii would reach equality in length with minute wave i.

Within minute wave iii subminuette wave ii may not move beyond the start of subminuette wave i. This wave count is invalidated at minute degree with movement above 6,708.17.