The behaviour of the BTI changed because expected decline failed to materialise, see chart.
When a decline does not occur within a limited period of time, investors regained confidence and we have a situation in which the bulls have the strong hand.
The fact that the FTSE made a new high on Friday supports our view that the FTSE will continue to push higher in the near term prior to making a top. Even the surprise drop in GDP did nothing to stop the rally.
Obviously the good US existing home sales numbers helped the market and there is a willingness to buy at these levels, but we must not get carried away, the market will probably continue higher but we are near the top.
Our timing indicators are approaching overbought and the wave count is near the end, we are in the final stages of the rally.
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