FTSE forecast

FTSE Short Term Forecast

Monday 15 March 2010

3.00pm GMT

Elliott wave count: Here is a long term forecast based on the unfolding Elliott wave pattern. From the 2000 high we have a pattern of higher low and lower high. On the monthly chart the low in 2009 [wave C (circle)] is higher than the 2003 low [wave A (circle)], the high in 2007 [wave B (circle)] is lower than the 2000 high. This long term pattern resembles a symmetrical triangle [A,B,C,D,E (circle)]. As you can see we are in the midst of wave D (circle), this wave could go up to 6600 next year. We can zoom in on wave D (circle) by adjusting the chart to a weekly chart, see below:

In a perfect world wave D (circle) should be in three waves [(A),(B),(C)] and wave (A) should be in five waves [1,2,3,4,5]. So far the pattern is textbook, wave (A) is in five waves and it is expected to terminate near 5750. From this simple observation we expect a major correction to start in the next few weeks [wave (B)], the correction could run until the fourth quarter this year. The overall forecast is, first a decline to 4700-4800 [wave (B)], then a rally to 6600 [wave (C) of D (circle)] next year.

What is the BTI (Bullish Trend Indicator)?

The BTI is a sentiment indicator used to assess the mood of investors. When the daily change in the BTI is down sentiment is bearish. When the daily change in the BTI is up sentiment is bullish. The BTI is used to assess the near term direction of the market and confirms the Elliott wave count.

The 34-day BTI is used to assess the main FTSE trend. When the 34-day BTI is positive we are in a bull market, when the 34-day BTI is negative we are in a bear market.

Bullish influence	Bearish influence
	Wave count
	US markets
BTI
34-day BTI	Top 20 Differential
	13-day BTI

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