The FTSE 100 monthly chart shows how the up-trend since 2009 has lost momentum, forming a large top. Reversal below 4800 would complete the reversal, offering a target of 3500*. Recovery above 6000 is unlikely but would indicate resumption of the up-trend.
* Target calculation: 4800 – ( 6000 – 4800 ) = 3600
Germany’s DAX shows a similar loss of momentum on the monthly chart. Breach of medium-term resistance at 6000 would indicate another test of 5000. Recovery above 7200 is unlikely.