Watch For FTSE Top 2/7/17 - 2/10/17

TVC:UKX   FTSE 100 Index
103 2
The RSI momentum indicator when used to measure stock and stock indices almost always needs a bearish divergence before a significate top can be achieved.

The FTSE 100 (UKX) since the February 2016 bottom is a good example.

Note the April and August RSI tops that were followed by only moderate declines that ultimately lead to higher prices.

The decline from the January 2017 UKX top has so far been in three waves implying it is just a correction in an on going bull market.

Watch the UKX from 2/7 to 2/10. If a new price high is made with an RSI bearish divergence it could signal the start of a multi-month bear trend.

My count is slightly different, but I agree a top might be made in the next week or so. The rise from 6674 was a clean 1,2,3 with wave 3 being exactly 1.618*W1. This suggests a five wave pattern under development but not yet complete, currently forming W4. W2 was short and sharp, which suggests that W4 is likely to be long and flat, probably a triangle. I think we've already had wave 'a' down, which needs to be followed by b,c,d,e before we get W5 upwards. Once W4 completes (which might take many weeks) the target for W5 is likely 7550/7600.

If FTSE does indeed get to the 7600 target area, that should be a wonderful opportunity to go short for a ride back down to the W4 low at 6674, or a drop of nearly 1,000 points. Well worth waiting for.
Hi @kunsan,

Thanks for the information.

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