Tag Archives: ftse wave count

FTSE Elliott Wave Technical Analysis – 17th February, 2016

Downwards movement was again expected for FTSE.

Although upwards movement remains below the invalidation point and is just at the trend line, this market is not behaving as expected. I have a new alternate wave count which should be seriously considered.

Summary: With upwards movement of 17th February on an increase in volume, this market is not behaving as expected. A new wave count is required. A new high above 6,115.10 would invalidate the main wave count and confirm the new alternate. At that stage, expect FTSE is most likely in a larger and deeper bear market rally which may end about 6,453.

To see a monthly chart and the bigger picture, with an explanation of why there are only bear wave counts for FTSE, click here.

New updates to this analysis are in bold.

MAIN 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, if this wave count is correct.

The main difference between this main wave count and the new alternate is the correction labelled here minor wave 2 within intermediate wave (1). This main wave count sees that movement as a combination: flat – X – zigzag lasting 19 days. There is alternation between minor waves 2 and 4: minor 2 was a combination and minor 4 was a triangle. Minor wave 4 lasted 35 days.

MAIN DAILY WAVE COUNT

FTSE daily 2014
Click chart to enlarge.

So far the middle of the third wave may not 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 completing 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 passed the 0.618 Fibonacci ratio. The last daily candlestick has closed just above the base channel. If this wave count is correct, then upwards movement should stop here. Price should find resistance at the base channel.

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.

ALTERNATE WEEKLY WAVE COUNT

FTSE weekly 2014
Click chart to enlarge.

The first movement after the all time high is seen differently for this alternate wave count. At the daily chart level, it does not have as good a fit which is why it will remain an alternate until confirmed by price.

If there are two corrections within there rather than just the one, now minute wave i does not subdivide perfectly as a five and looks like a three on the daily chart.

Now minor waves 2 and 4 are more grossly disproportionate.

This wave count sees the possibility of a five wave impulse over at the recent low, with minor wave 5 an ending expanding diagonal.

Intermediate wave (2) may continue for weeks and may end about the 0.618 Fibonacci ratio at 6,453.

Intermediate wave (2) may not move beyond the start of intermediate wave (1) above 7,122.70.

ALTERNATE DAILY WAVE COUNT

FTSE daily 2014
Click chart to enlarge.

If price moves above 6,115.10 and invalidates the main wave count, then this wave count would be confirmed.

The most likely target for intermediate wave (2) is the 0.618 Fibonacci ratio at 6,453.

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.

Upwards movement for the 17th of February comes with an increase in volume. This is concerning for the main wave count and supports the alternate.

The stalled pattern, a bearish version of three white soldiers, is invalidated by the following long green candlestick.

ADX indicates the market is not trending, but it may be about to indicate a trend change: the -DX line is crossing below the +DX line.

ATR is increasing. This indicates the market is trending.

RSI is just above neutral. There is room for this market to rise or fall.

Stochastics is also just above neutral. There is room for the market to rise or fall.

This analysis is published @ 03:43 a.m. EST on 18th February, 2016.

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.

FTSE Elliott Wave Technical Analysis – 2nd February, 2016

A new low below the August low of 5,768.22 was required and expected.

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Continue reading FTSE Elliott Wave Technical Analysis – 2nd February, 2016

FTSE Elliott Wave Technical Analysis – 25th January, 2016

A new low below the August low of 5,768.22 was required and expected.

Summary: The middle of the third wave cannot have passed yet for FTSE. The correction can only be another second wave bounce. The invalidation point is at 6,314.6.

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 of the last three days 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.

Minuette wave (ii) may not move beyond the start of minuette wave (i) price territory above 6,314.6.

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 be expected to be quicker than 9 days. So far it has lasted three. It should be choppy and overlapping and volume should decline as it continues. It may end about the 0.618 Fibonacci ratio of minuette wave (i) at 6,048. If it is deeper than that, then it should find resistance at the upper edge of the pink base channel.

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

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.

As price falls, it comes with stronger volume consistently. The fall in price is well supported by volume; the strongest volume is seen on downwards days. The volume profile continues to be bearish.

ADX is still increasing indicating a downwards trend, but the rate of increase is declining. ATR is declining indicating the market has just entered a correction.

This correction is resolving RSI being slightly oversold. It is returning to neutral.

If FTSE is in a correction, then it may not find resistance at the 9 day EMA and may whipsaw about that line. Resistance may be found 1,950, the next horizontal trend line. The upwards swing should be expected to continue until price finds resistance and Stochastics reaches overbought at the same time.

This analysis is published @ 02:12 a.m. EST on 26th January, 2016.

FTSE Elliott Wave Technical Analysis – 15th January, 2016

FTSE continues to fall as this analysis has been expecting.

Summary: FTSE may still be within the middle of a third wave down, and the very middle has not yet passed. Downwards momentum should be expected to increase. The middle of the third wave may end at 5,383. Look out for surprises in this market to be to the downside, not just in price but market behaviour overall.

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.

A new low below the August low of intermediate wave (1) at 5,768.22 is required and expected.

Minor wave 4 may not move into minor wave 1 price territory above 6,079.79 when minor wave 3 is a complete impulse.

DAILY WAVE COUNT

FTSE daily 2014
Click chart to enlarge.

The current wave down for FTSE may be a strong third wave. It is my judgement that this wave count has a higher probability.

If the next wave down shows an increase in momentum, then this would be confirmed as the preferred wave count for FTSE.

At 4,296 intermediate wave (3) would reach 1.618 the length of intermediate wave (1). When minor waves 3 and 4 within this impulse are complete, then the target may also be calculated at minor degree. At that stage, it may widen to a zone or it may change.

Within intermediate wave (3), I am removing the target for minor wave 3. It will again be calculated when minute waves iii and iv within the impulse are complete. For now I want to focus on the next interruption to the trend expected at the end of minute wave iii.

At 5,383 minute wave iii would reach 1.618 the length of minute wave i. If this target is wrong, it may not be low enough.

The pink channel is a base channel drawn about minute waves i and ii. The lower edge should be breached by a strong third wave, but before that happens that line may provide a little support temporarily. That same line may provide resistance for a throwback when it is breached.

When the base channel is breached, then it may be removed and an acceleration channel drawn.

No second wave correction may move beyond the start of its first wave above 6,011.13 within minuette wave (iii).

I will keep following the alternate in last analysis, but I will publish only one wave count today for reasons of clarity because the alternate does not diverge in terms of short term structure or expected direction at this stage.

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.

As price falls, it comes with stronger volume consistently. The fall in price is well supported by volume; the strongest volume is seen on downwards days. The volume profile continues to be bearish.

ADX is increasing indicating the market is definitely trending and the trend is down. ATR agrees as it too is increasing.

RSI is not yet oversold. There is still room for this market to fall. RSI can move into extreme oversold and remain there while the market continues to fall in a strong bear move. I will be looking for divergence between price and RSI to indicate a bounce and will not necessarily expect RSI moving into oversold to indicate the end of this third wave.

Stochastics is oversold, but this oscillator may remain extreme for reasonable periods of time during a trending market. It shows a little divergence today between the last low for Friday and the prior swing low of 12th January. This may indicate another small bounce to unfold when markets open next week.

Along the way down, FTSE may find resistance at the 13 day EMA.

This analysis is published about 01:01 a.m. EST on 17th January, 2016.