In yesterday’s post we said FTSE dip was corrective and should find buyers soon for the next leg higher. Index rallied as expected and we think wave X low is in place at 6636. Rally from 6636 low is taking the form of an Elliott wave impulse which we have labelled as wave (a). Once completed, we expect a pull back in wave (b) and higher again. As the trend is up and pull back is shown with a dotted line, we don’t like selling the Index in proposed pull back and favour the long side after (b) wave pull back in 3, 7 or 11 swings. This Elliott wave view would be valid as far as pivot at 6636 low remains intact. We think it’s very unlikely but if pivot at 6636 low gives up in our system, that would suggest Index did an Elliott wave FLAT in (( x )) and would still find buyers lower at equal legs of (( w )) – (( x )).
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