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This has not substantially affected the uptrend, however. And the longer this sideways churn continues, the more dynamic the ultimate break is likely to be. My target remains unchanged at 6922.
The Bank of England's new governor, Mark Carney, is so far living up to high expectations. I believe broadening monetary policy – specifically the question of when to raise or lower interest rates – and including an unemployment rate target, is entirely appropriate, and should have been introduced decades ago. The one-dimensional link between interest rates and inflation is yesterday's policy, championed largely by tired and antiquated economists who fail to understand the new economic dynamics. Personally, I would go further and include minimum targets on gross domestic product (GDP) too. This would strike an even better balance between growth promotion and a healthy rate of private-sector inflation.
Mr Carney also understands the need to nurture the UK banking sector back to good health, without which growth will only be restrained. Last week's policy announcement from the central bank proposed easing liquidity rules for UK lenders once capital adequacy targets have been met. I see this reconciliatory tone towards the banking sector as well overdue, and Mr Carney appears to be leading the way.
The recent pull-back on the FTSE 100 extended the decline from 3.125% to 4.165%, demonstrating a 'thirds' rhythm. The index had earlier rallied back to test 6491, the lower parameter of my expected support band of 6491-6556, before retreating into the week's end. It looks to be a wrong-footing 'tease' however, and unfinished business to the upside remains the most likely event.
Recommendation: Stay long. Target 6922. Stop-losses can remain in place, triggered on momentum beneath 6300.