Saturday, March 26, 2016

London Calling?

So, I periodically like to ‘check in’ with foreign markets to see what may be in store for us, and I reviewed the London FTSE. It wasn’t until I had done a detailed analysis until this possibility arose.

If this pattern is correct, it would be one of “the best” examples of a contracting ending diagonal I have ever seen, besides the one I called on a daily basis that topped on May 15th in the S&P500 index in the U.S. Keep in mind, this is a ‘monthly’ chart. Rarely do you see pure Elliott patterns play out to this degree of perfection on the monthly. But here it is.

What is so perfect? Wave (v) is exactly 50% of wave (iii), wave (iii) is exactly 78.6% of wave (i), wave (iv) is exactly 61.8% of wave (ii) and wave (iv) overlaps wave (i). This constitutes all of the critical dimensions of a diagonal (wave five shorter than three, three shorter than one, four shorter than two, and four overlaps wave one).

London FTSE - Monthly - Click on Chart to Enlarge

Uh, oh. If this is the case, then FTSE has topped for a very long time, BUT, and this is critical – what happens if price only retraces to the lower diagonal trend line again on a monthly basis? Would this be ‘enough’ to allow the US Indexes to put on their final high? Let me be clear, I do not know the absolute answer to that question, but there is that very long tailed candle at the bottom of last month. So, if foreign markets do move up again for a month or two, it does seem ‘possible’ at least that the new high is made in US markets.

Cheers and enjoy the chart!


  1. I count it the same way and also the detailed count you posted on TC`s site. But i think that the last wave C is already finished as an EDT. Isn`t it normal in a running correction that wave C just corrects 61.8% of wave B?
    This whole chart looks so weak like a stone flying on a sea and dropping always lower on every bounce until it submerges.

    1. Which site it´s TC´s??? I follow more the DAX and the Ibex35 (Spanish Index)....... the Sp500 i think its pretty caotic at times, at i think from an Elliott Wave perspective more interesting to follow the S&P 500 EQUAL WEIGHTED which makes a more global view of the US Markets.