So again we are wrong, the FTSE did make a new high and may even make a slightly higher high in the next week or two. However, the conclusion stays the same and that is that this index is ripe for a sizeable drop soon. Interestingly the offending new high, so far, is (6895-6876) all of 19 points or less than 1/3 of one percent measured over a period of, rather precisely, a year.
Just to put things in a longer term perspective, here is the twenty year chart. The Footsie is trading below where it was in late 1999. Clearly this index is in big trouble if it cannot decisively break the 7000 level soon. In our opinion it will not. See also previous blogs.