FTSE 100 post Brexit

[Mercury]

If the Large Cap US stock indices post a new all time high then the FTSE will catch a bid.  There has been the expected overreaction to the Leave vote but in the context of the start of the pre vote rally (from June 16 lows) the market is actually up (weird right!).  As Carney announces his packages of support and the Fed joins in I see a rally up to a Wave 2 retrace (see weekly chart).

 

However I can't yet say for sure if the wave B (Pink) has been posted.  If it has then we should see a retrace back down in 1-2 form before a rally up but if not then a fresh low to complete the Wave B (Pink) could see the market hit the 5500 level.  Having said that the price hit perfectly on the Daily chart down tram (red) and a set of parallel trams shows the area of a possible Wave 2 high (purple).  Ideally I would like to see a bottom on the key indicators to coincide with Wave B (Pink so a close further low could be the resolution to this before a strong rally.  Key will be what the US markets do in my view.