We have had the FTSE break both the recent downtrends over the last 2 weeks and with the current higher high and the bounce from the 200 day moving average, it appears that the UK Index is now on the road for another run north over the coming weeks and months.
The 5 wave structure is the same as the ASX200 that I flagged earlier in the week. We are presently at a cross roads with the indexes. We could either see a retracement back to roughly 50% of the recent move up before going long again, forming an inverse head and shoulders pattern and then giving us a target just to the outside of the top of the trading range that we have been in for the last 4 months, or we could have a strong acceleration out of this pattern as short covering and new money flood into the markets.
Something to watch very strongly over the course of the next week or so.
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