Reply To: Monday 16th to Friday 20th September

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    FTSE 100 Daily chart

    Based on the position of the 34-day BTI I believe that the rally will extend above the previous high set on 2nd August [6696]. However, there are still some potentials market moving events ahead like Wednesday’s FOMC meeting and rising bond yields.

    When the 34-day BTI is below -400, the FTSE is near a bottom. It is conceivable that the bottom was on 22 August and the current rally will extend. The 34-day BTI has turned up.

    At the moment the other component of the ESI, the BTI, is down but the 34-day BTI is up, when the two indicators are in opposite direction we should be neutral until the two confirm each other.

    If the BTI turns up, and I will alert you when it does, we can increase our long exposure. I think the FTSE is tracing out an upward zigzag for wave 2. Wave 2 should end near 6800 sometime this week or next week. Thereafter and going into October I expect another sell off.TL.