It has not been easy to figure out the FTSE EW pattern since the top and I have suggested in previous charts that FTSE may be creating a leading diagonal.
The pattern has become a bit clearer recently and my prediction of an impulse wave down since the top has NOT changed although I have modified the EW labelling as shown on the new chart.
At present FTSE looks to have completed an expanded flat a,b,c circle. These structures typically occur in a 4th wave correction and this ties up perfectly with the highest downward momentum as would be expected for a wave 3.
If correct FTSE will now conclude wave 5 which cannot be longer than wave 3 in this case. A possible target would be the 0.5 fib retrace of the previous impulse wave or around 6706. where significant support exists.
If we take DAX in analysis and compare it with FTSE, we will see that FTSE is lagging DAX. DAX topped in January and in my opinion wave (1) of bearish market ended at April, followed by a corrective countertrend that ended in late May (FTSE top). Since this top, a sequence of three 1-2 waves are visible. The other count is the same leading diagonal in FTSE, but leading diagonals fit better in waves C and 5, not in wave 1.
It isn't a incorrect count, but it creates a big problem to all previous waves counts in several European and US indexes...
What do you think?
allanrcferreira
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Looking at FTSE, I am considering that wave (5) was the Market top in late May. If we take this, bearish market is underway. The problem is: the first swing low was 1-2, followed by another i-ii, and IMO, we are inside waves 1-2 of iii. I agree with your expanded flat view, but the leading diagonal is not the best view. Why? Because using a 1-2, i-ii sequence, we can see a descending channel linking 1 to i and 2 to ii. The bearish potential is enourmous with this count, and a close under this channel will signal wave iii.
The leading diagonal creates a premature end of DT, and other indexes are not signaling the same, unless you consider the alternative scenario presented in DJIA and US indexes.
Your count make me think first swing was a,b and not 1-2, - and the leading diagonal will do 5 waves to complete c. This count denies wave (5) vision from May top.
allanrcferreira
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Not so sure about FTSE 100. The alternative count is a 5-3-5 zigzag, and the uptrend move is wave (1) from an emerging uptrend.
I don't like this count... an expanded flat is the only possible bearish count. The bullish count is a doomsday for all year count, where the last 2 tops where wave 3 and 5 of (5).
Geofftv1
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@allanrcferreira, FTSE is tricky to analyse at present, I often check the ISF etf which tracjs tge FTSE
And gives a clearer picture.
FTSE often leads the US indices in the larger trends along with the DAX bith of which are down heavily.
If the US indices do fall heavily FtSE will follow. I am also short FTSE and have had good sucess so far.
It isn't a incorrect count, but it creates a big problem to all previous waves counts in several European and US indexes...
What do you think?