The FTSE Has Peaked

I had been wondering what would break the markets out of their recent uptrend and it looks like the impending bankruptcy of Cyprus with its implications for the Eurozone has done the trick. Strictly speaking, the pattern that I mentioned in my last post isn’t complete until the index dips below the moving average again, but I am confident that will happen in the next few days. I have added a page to my website illustrating the previous instances of this pattern and, looking at that, I would suggest a tentative target of 5700 for this downturn over the next four months or so. The height of the peak this time is 4.1%, which is at the high end of the medium category, so I think a moderate decline of 12% is a reasonable expectation.