Has the market discounted the economic recovery too early?

Having spent the past six weeks trading in a tight range of 100 points around 4,400, the UK FTSE 100 has recently fallen back to its end of April levels.

Investors are now asking if this is a much-needed consolidation before further gains are made, or if the rapid recovery from early March lows of 3,500 which gave a 30% gain, will prove to be a  bear-market rally that could unwind as the market heads for new lows. I believe we have passed the low points in this economic cycle, and although the recovery may stutter and falter, the market should not go below the levels seen earlier this year. Many of the leading indicators are beginning to turn upwards, signifying that while the global economy is still weak, it is deteriorating at a slower ...