FTSE Analysis

Well, it failed in the 5400 region... AGAIN and does look like a top is being formed. There is one count that i havent mentioned which looks good on the dow but i thought not too good on the FTSE, i maybe wrong. This is the expanded flat wave 2 count. The fibs seem to be fitting pretty well on this.

Take the 1st July to 14th July top as Wave 1 of c being 519pts. Now if Wave 3 is 0.618 in length of wave 1 we get 320pts. Take the top of wave 3 on 27th July to the start of wave 3 on 20th July and its 324pts. Thats close enough to count as a 0.618. Now if Wave 5 which i guess we're in now is 0.618 of Wave 3 it equals to 200pts. Take the start of wave 5 on 30th July and add 200pts we get 5438.

5438 is again a significant number as its the 0.618 retrace of the drop which started on 15th April. And what do Wave 2's normally retrace Wave 1 by??? yes, 0.618!!!

Well, its just some ratio analysis which fits well this count. So tomorrow could be a classic buy the rumour sell the news situation ahead of NFP.

FTSE Analysis

All 3 counts mentioned on the last post are still valid but it is looking ever more bullish for the time being.

The double top count is still in due to the fact we keep getting failures at the 5400 area. However todays dramatic reversal and ABC formations on the bigger scale suggest more upward movement. Count #2 from the previous post, the zigzag would just have one more 5 wave movement up. in the c wave from 30th July, if c is to equal A we would fall short near the 5500 area above the .618 retrace of wave 1

If this is Count #3 ending diagonal (ED), i would think we're in the 3rd wave up with one more high before a short break for wave 4. Wave 3 would be shorter than wave 1 if it is a ED. But its important to keep in mind that its very rare ED's occur in C wave position (according to the EWP book that is!)

FTSE Analysis

Theres potentially 3 different counts on the FTSE at the moment.

Count Number 1

The Double Top, which is where we are at the moment. From the 20th July low is a clear zigzag formation upwards. From Fridays low we've also had 5 waves up. The 1st wave on the 20-21st July is pretty much equal in points to the 5th wave up we had from late on Friday. So theres a possible truncation scenario here as theres roughly 5 failures around this mark.

Count Number 2

We're in the final stages of a zigzag correction up. Tomorrow could see a slight correction from todays overbought conditions. If this is the case and a temporary top is in, the count would be going into B of C of C of 2/B. Will be looking for a drop potential to the 5362-5371 area.

Count Number 3

This is pretty much similar to Count Number 2 but the C wave up starting from the 20th July low would be a ending diagonal in C wave position. Now as we know these are pretty hard to call in EWT terms if you stick to all the rules. The rise right now would be wave 3 of C.

If i had to choose a count, id be spilt between counts 2 and 3 at the moment. I think the weekly stochastics need to go a bit more higher for a decent sell off to occur.

The dollar is getting pretty overbought, cable hit .618 of the drop it had recently on the daily chart. USD suggests a turn is very near.

As a general guide on the weekly charts i sometimes look at the number of candles each particular wave does. corrective waves candles as a guide (doesn't happen all the time) start to turn after reaching the number of candles of the previous wave. For example, from the April, on Daily we had 12 candles as part of the whole wave which went down. Now counting upwards from W27 July we're in the 6th candle up, which is half of the candles that did the first drop. Something to keep an eye on here for potential turns