UK market timing

FTSE Short Term Forecast

Tuesday 27 January 2009

8.00am GMT

FTSE short term forecast: Down

First a rally to 4260, then a decline to 3600

Selling area: 4250 or higher

Stop loss: 4677

Model portfolio exposure: 0% neutral

BTI: Down

34-day BTI: Positive

13-day BTI: Neutral

The rally is underway and nearing an end but the US markets have more upside potential in the near term, the Dow Jones target is 8400. The FTSE's upward correction [(a),(b),(c)] could end near the 38% Fibonacci retracement [4261]. Any move near or above that level would present an opportunity to go short in anticipation of the next major decline. In the short term the FTSE is expected to decline to 3600 so we are looking to sell the rallies but from higher levels. In a counter trend rally we do not need to wait for the 13-day BTI or Top 20 Differential to become overbought as very often the bounce is not powerful enough to bring the indicators to overbought.

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.

The 13-day BTI is used to identify intermediate FTSE tops/bottoms. When the 13-day BTI is overbought the FTSE is near a top. When the 13-day BTI is oversold the FTSE is near a bottom.

Bullish influence	Bearish influence
	Wave count
	BTI
	US markets
34-day BTI

I understand that these pages are copyright-protected products of e-yield. It is illegal to forward or re-transmit these pages or allow an unauthorised person to view part or all of these pages without written authorisation. I agree that if I break these restrictions I will accept full financial liability to pay the annual subscription price for all additional readers or recipients.

Disclaimer

e-yield does not make any personal recommendations. The information on UK Market Timing is provided solely to enable investors to make their own investment decisions and does not constitute a recommendation to buy, sell or otherwise deal in investments. If you have any doubts, you should seek advice from an independent financial adviser.

All opinions and content in this report constitute general market commentary and does not constitute investment advice. Content and research is subject to change without notice. e-yield and the author of e-yield does not accept responsibility for any investment decision made by a user on the basis of our research.

The price and value of investments and the income derived from them can go down as well as up, and you may not get back the amount you invest. Changes in the rate of exchange may have an adverse effect on the value, price and income of investments in a currency other than your own. Past performance is not necessarily a guide to future performance.

Quotes and research data provided on the e-yield website are obtained from sources which we believe to be reliable, but we cannot guarantee the accuracy, timeliness or completeness of such information for any particular purpose and shall not under any circumstances be held liable for any consequent loss or damage whatsoever arising from the use of the information provided on the site.