Technical Analysis of Financial Markets

Wednesday, July 16, 2008

FTSE, 50% Fibonacci Retracement

Since October 2007, the FTSE has declined 35% in corrective A-B-C formation where wave C is currently progressing to complete a measured move equal to wave A; i.e. A=C. Completion of wave C also coincides with the 50% Fibonacci retracement of 5-year bull market rally which commenced in March 2003. This may establish an area of support at 5015 in the cash market. An entrance into a long position with a stop on a weekly close below 5000 may serve as low-risk trade.

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