The FTSE has reached our initial target at 5190 and also filled a previous unfilled closing gap at 5150 from the 6th September.
The question now is whether this move down is part of a larger and more severe decline which would carry the stock market to 4800 and below in the next 2 weeks. The open should give us some clues today as if the pattern is correct, then this is wave 3 down (the most powerful wave down in a wave sequence) and I would expect to see prices trade below 5150 and also break down through 5132 today.
(Since writing this report prices have dropped to 5120 so I would imagine we will trade below 5132 at the open.)
The catalyst for deeper selling is Greece defaulting and this may come to a head this week.
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