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UK market analysis

Bill's analysis of the FTSE 100

FTSE 100 index analysis from Wednesday 16th November 2005 to 6th January 2006

Analysis from 16th November 2005

It's not clear whether Footsie has made a complete five up from the wave 4 low. The little shape at the top could be an expanded flat, and there could be some support on the trend channel midline.

Here's how it looks on the 20 minute chart.

And here's the down trend which should be wave (c) of iv (circled). I think it has bottomed at 5391.8 - and indeed, with Footsie now up to 5421, that seems likely. If I'm right that it's not yet the start of a down trend, we should see the last up leg starting, and it might make a new high. One cannot yet be completely sure about it, but if the market makes a three wave upwards correction and then an impulse wave down below 5391.8, it raises the odds that the market has topped out quite considerably.

Analysis from the 28th November 2005

Wave v (circled) does not appear to be complete, but it isn't yet clear what the long sideways meander after the 5453.4 low is. Wave iv (circled), though, probably has concluded at 5391.7. All I can say at the moment is that a move below 5391.7 should signal a bigger retracement, but until that happens the market still retains the potential to drift higher in an ending diagonal fifth wave, or even to burst higher in an extended fifth wave.

Analysis from the 5th December 2005

The FTSE 100 appears to have made a zigzag down, then a small impulse wave up, which is rather more consistent with an ending diagonal, as sketched below, than a continuing wave iv (circled) triangle. It doesn't completely rule out a strong impulsive extending fifth wave either. It makes 5423.2 the essential stop loss for long positions.

Analysis from the 6th January 2006

Now as you know, the apparent triangle in the second wave position has been troubling me. But I think I've seen a solution, as below. It was the fading MACD which made me think of it. That apparent triangle is probably an ending diagonal in an expanded flat wave (ii). You'll see the detail in the next chart. That wave (ii) is the either the second wave of iii (circled) or of v (circled). The fading MACD suggests it should be the latter, not the former. The proximity to the two thirds retracement supports that view, but if it is right, there should be a very strong reaction downwards when the impulse sequence from 5423.2 completes. If that doesn't happen, there's something wrong with the wave count.
Here's the detail. We need a dip towards 5633 and then one more rally above 5722 to complete the impulse sequence from 5423.2.
Here is the FTSE as at the close on 13th January 2006

 

 



 

 

 

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