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