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The FED and central banks are giving the bears a fantastic opportunity to short the FTSE 100. Each time they come with a rescue plan, the FTSE 100 rallies strongly then falls back. The latest rescue plan announced on Tuesday boosted markets around the World. The Dow Jones gained 3.5%, the FTSE 100 was up 1%. But that rally has now ran out of steam and the trend turned down - Bear Stearns many thanks..

Each rally is a bear market rally. One of my proprietary indicators, the 34-day BTI, became negative on 22 January 2008. The 34-day BTI is a reliable sentiment indicator used to assess the short term direction of the market. When the 34-day BTI is negative the main trend is down and rallies are counter trends.

This week's rally was so weak that it retraced less than 40% of the previous decline. As the main trend is down, this latest rally is probably wave (ii) of a five-wave decline. Wave (i) appears to be in three legs [a,b,c] so the most probable pattern is an ending diagonal [(i),(ii),(iii),(iv),(v)]. Wave (iii) is underway, an initial target is 5,400

The unique timing analysis at e-yield has been developed by Thierry Laduguie, who has been working for investors since 2000. For more information, visit E-yield.co.uk

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