Yesterday the UK and US markets were closed but in Europe markets were open, the DAX was very strong. This will translate into a positive open in the UK with the FTSE 100 rallying back to last Thursday's high at 6846, the S&P 500 is trading above its key resistance of 1902. It looks like stock markets are heading higher in the next few days.
The 34-day BTI is no longer above 400, this indicator has pulled back in the last few days, it is now neutral. You will recall that a move above 400 is bearish, in general moves above 400 kick start a multi-week decline and in this situation the BTI, our sentiment indicator, will turn down to confirm the 34-day BTI signal. This is not happening, the BTI is rising and because the BTI is the leading indicator we can say that sentiment is still bullish.
On the daily FTSE chart, the rally from the March low is wave c (circle) in five waves. Each wave [1,2,3,4,5] is a large zigzag [a,b,c (circle)], this is why I believe wave 3 is still in progress, wave 3 should end below 6935. The question is how will prices move to that level? Will they rally immediately from current levels or will they drop to 6750 ten rally to 6935? It is not easy to answer this question, both scenarios are valid.