The strong reversal from the April 2018 high appears impulse looking on a few world stock markets, particularly the FTSE and NIK-225. So we are focussed on the cleaner patterns from the April high. Having put in a 5th wave to end an impulse wave from the April 2018 high a few days back, the subsequent bounce we have seen over the last few days is of no surprise to us, its actually what we want to see, as we are looking for a partial retracement in 3 or 7 waves to offer a bearish setup for a move lower.

The bounce may still see a bit more upside and test the 7300 area (7350 cash market), but as long as the current bounce remains as a 3 or 7 swing rally, and holds below 7474 (7527 cash market) then it can offer traders a setup to move lower. A strong move under 7200 would be the first clue to support a move lower and argue the recent bounce we have seen over the last couple of days has likely ended.

ElliotWave

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