[pcabc]

Currently, the UK market is in varying phases of Stage 3, as can be seen from the FTSE100, FTSE 250 and AIM All Share Indexes below:

As with the US, the UK market is seeing a rotation to the larger cap value stocks at the moment, with small and micro cap stocks getting hit hard as you'll have seen from the large number of Stage 3 and 4 stocks appearing in the daily watchlists. But the quality of any new breakouts has continued to be quite poor, and so that makes me cautious still on whether the breakouts in the larger caps is to be trusted or whether it's just the last part of this phase of the bull run that began in 2011, as the large cap defensive stocks are always the last to breakdown I believe.

So I'm continuing to sit on sidelines, as I have since late March, as the quality and quantity of Stage 4A breakdowns continues to outnumber the quality and quantity of Stage 2A breakouts by a long way. Although last week was the first week in a while, that the Stage 2 breakouts and continuations where showing better quality imo. So a short term improvement, which can be seen in the bounces in the small and micro cap charts above.

I agree with you on this and here is a quote taken from Mark Minervini book, Trade Like a Stock Market Wizard, which I just read only a few days ago. Its from Chapter 9, Follow The Leaders.

"Market leaders tend to foretell turns to the downside as well. As a bull market enters its later stages (generally after one or two years), many of the leadership stocks that lead market advance will start to buckle while the broad market averages march on towards their tops. Typically, a second wave of postleadership stocks start to perform relatively well as money rotates out of the true leaders and into some of the groups constituents, laggard followup stocks, or defensive groups such as drugs, tobacco, utilities, and food stocks that are thought to be less sensitive to an economic downturn. Follow-on stocks and laggards, however, rarely experience the length or, more important, the magnitude of the price move that true market leaders accomplish. When you see this rotation occurring, its a warning that the market rally may be entering its later stage. The ultimate market top may still be weeks or even months away, but this internal market action is a proverbial shot across the bow that get your attention."

I think that paragraph sums up what isatrader stated and also what the market (FTSE at least) is currently experiencing.

My only doubt is the US markets, and how rigged these are, but also, they are still showing good breadth, and this could pull the FTSE up with it.

Interesting. In the time before I learned about stage analysis I was reading up a number of articles. There was much discussion on great shares to have in your portfolio and keep forever, the likes of Diageo, Tesco, GlaxoSmithKlein etc. These then promptly stated misbehaving. I wonder if they were doing as you described above?

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The other thing is, if you are only trading UK stocks then you need to look at creating UK breadth charts, as these will be different to the US.

Yes, that ought to be high up on my todo list. I've probally got enough shares in my database to create my own advance/decline chart etc, but it would be better to find the data to do this with recognised indicies - not adhoc like my list.

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OK, responses are now getting out of sync!