
The British stock market might not be as attractive as its US counterpart due to its lack of big tech darlings, but it has been quite resilient. While the S&P 500 lost 27.5% from peak to trough in 2022, the FTSE 100 fell by less than half of that at -12.7%. And while the following recovery has been less spectacular, as well, London’s blue chip index is nevertheless hovering near all-time highs.
Coupled with economists’ expectations that the UK economy is going to exit its technical recession this quarter, investors cannot be blamed for feeling optimistic. Unfortunately, the Elliott Wave chart below suggests that their hopes might be misplaced.
Similar Elliott Wave setups occur in the Forex, crypto and commodity markets, as well. Our Elliott Wave Video Course can teach you how to uncover them yourself!

The daily price chart of the FTSE 100 reveals that the recovery from bottom of the Covid-19 panic in March, 2020, is shaped as a five-wave impulse. We’ve labeled the pattern I-II-III-IV-V, where waves II and IV have retraced down to the 61.8% and 38.2% Fibonacci support levels, respectively. The five sub-waves of wave V are also visible.
According to the Elliott Wave theory, a three-wave correction follows every impulse. And indeed, it’s been more than a year since the FTSE 100 reached its record of 8047 in February, 2023. The problem is that this recent weakness is far too shallow compared to the impulse it retraces. It is therefore quite likely that the drop to 7207 in March, 2023, wasn’t all of it.
We believe it was just wave A of a bigger A-B-C expanding flat correction, which is still in progress and whose wave C has yet to drag the index notably lower. Wave B looks like an almost complete flat, as well, whose wave ‘b’ was a triangle. If this count is correct, the FTSE 100 might be able to climb to a new record, but that would be nothing to celebrate. Wave C can potentially cause a slump to the support of wave IV near 6700. Assuming a bearish reversal near 8200, that’ll be a decline of about 18%, before the bulls show up again.
In our Elliott Wave PRO subscriptions we provide analyses of Bitcoin, Gold, Crude Oil, EURUSD, USDCAD, USDJPY and the S&P 500 every Sunday and Wednesday! Check them out now!