FTSE 5400

The FTSE 100 Index displays a  bearish divergence with failure of support at 5200 signalling the next correction. I use the Weekly 10ema(5264) > 20ema(5114) as a Guide to market direction. It gave as SELL signal in Jun07 at 6500 and again in Jan08 at 6250 and a Buy signal on Monday 13th July09 at 4250, when the Market continued to rise and peak 90 days later on Monday 16th November at 5400. Latest High was reached 30 days later on Wed 30th December at 5445.Watching for a new High in week ending 22nd Jan and a Target 5700 (45 days), falling back to 5450 by early Feb and the rising to a new High by 22nd Feb at 5800. Retest support at 5450 by 9th March and then a New High at the next 90 day cycle point on the 22nd March at 5900.

Plan for January 2010.
Watching for a 1% drop to support at 10ema(5360) and Buy for a possible spike above 5445 on Tuesday 5th Jan. Will enter a Short 5450-5500 and close on retest of Daily 20ema (5324) where I will go long into 22nd Jan High target of 5700.

Alternative Scenario 1990 - 2000 - 2010
2010 is going to be like 1990 and 2000 and be down 10-12% bouncing between 4800-5500 and ending at 5000. Jan (5555),  March (5400) May (4800)  Sep (5400) Dec (5000)


Year  Open High Low  Close

2000 6930 6930 5915 6222 - Down 10%, High Jan, Low Apr
1990 2159 2479 1974 2144 - Down 12%, High Jan, Low Sep

DOW example for the last 5 decades

Year  Open High Low  Close

2000 11502 11600 9571 10788 - Down 6%, High Apr, Low Oct

1990 2753 3024 2344 2634 - Down 4%, High July, Low Oct
1980 838 1009 730 964 - Up 15% High Nov, Low Mar
1970 800 848 627 839 - Up 4% High Dec, Low May
1960 679 688 564 616 - Down 9% High Jan, Low Oct