FTSE100 Looking BEARISH

The long term outlook for the FTSE100 is not looking good as it seems an 'ending diagonal' or a 'leading diagonal' has formed as shown in this weekly chart.

'A leading diagonal (or an ending diagonal) is typically followed by a deep retracement' (Frost & Prechter [Elliot Wave Principle]).

Also, 'the fifth wave of an ending diagonal often ends in a "throw-over" i.e., a brief break of the trendline connecting the end points of waves (1) and (3)'.

Therefore, it is highly likely that the FTSE100 will eventually retrace down to meet to the lower trendline shown in the chart at around the 6000 price level. A throw-over is also possible, whereby the upper trendline will momentarily be broken upwards prior to the move downwards. This is something to keep in mind if placing stops close to the high.

I hope you enjoyed this analysis and I welcome any comments / alternate views.