The 5 year high/low of FTSE is 6900/3600. This produces a 50% Fib level of around 5250. If one uses this as a new high (5250) and the low of 3600 then we have a 50% Fib level at 4425, not far off its present level of 4397. With all the bearish sentiment that's doing the rounds it's likely to retrace from this level to the next lower level of 4230 the 38.2% fib level (created from the 5250 high and 3600 low). Since there is a majority of opinion around that we have seen the end of the bear market it's possible that the next movement from 4230 would be upwards. This should complete the formation of a double bottom which should provide enough energy for it to break the level at 4425 and heads towards the 50% level at 5250. It is likely, however, to hover around 4861, the 38.2% level, formed by the 6900/3600.

What is the time scale of all of this? I reckon the FTSE will end the year at around 4230 before it begins to push upwards again next year (election year in the US) stopping around 4861 in the summer months before heading towards 5250 around September.

This is just of a continuation of the massive endorphin injected by England's win over France this am. Who knows if we beat the Aussies next weekend I might even see the FTSE heading towards 7000 by the end of next year. Next weeks post should be interesting.

Diego

And scotland stuffing the dutch at footy to so we can have a holiday in Portugal next year