FTSE Outlook for 5th Jan 2009

Apologies for the lack of new posts last week. Winter flu and a nasty malware attack on my pc kept we away.

Last week, FTSE failed to match my bearish outlook. I had mentioned a bullish alternative too - a target of about 4547. It has since hit/exceeded that target having completed a decent 360 degree move on the Square of Nine. Whence from here? There are several TA pointers to a possible top here.

Firstly, FTSE seems to have completed an identifiable 5-wave move (as marked on the chart). Secondly, the 360 degree level that is has presently reached is itself a danger point from where a reversal is quite likely. There are a few other minor indications (unfortunately, I cannot reveal them without getting into copyright issues). Come Monday morning, I will don my bear hat for sure. But if the market proves me wrong, I am quite happy to ditch that and turn bull! After all, we are obliged to trade what we see and not what we think!

Finally, here's a range projection for Monday's FTSE: We could see a move of about 66 points in either direction. So either a possible high of 4627 or a possible low of 4496.