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Halfway House

Posted on Wednesday, February 03, 2010

Having hit a recent peak 5,500 the FTSE appears to be on its way back down. As I write this it stands at 5,197, recording a drop of over 5% and therefore half of a correction.  A correction is a very calm word to record a 10% drop in markets which is 40% of a crash, as a crash is officially 25%!

The recent drop is 50% of a correction and 20% of a crash.  It will be interesting to see how far it falls. To predict the market in the short term is a close to gambling as you can get, and therefore my odds are 3/1 on a drop to around 5,000 and a quick upwards correction (plus 10%) back to 5,500. Of course, even my odds will no doubt be wrong!

Colin Lawson
Managing Partner

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