From the peak last May of 7877 the FTSE 100 (UKX.L) has subsequently endured a narrow band trading period over the summer months, it has since then dropped from 7540 at the end of September to a low of 6585 at the end of 2018.
Over the last few days it has shown some recuperative spirit up to 6900. In market trading terms that is very encouraging. It would be unreasonable to expect a continuation of such pace of recovery.
Political uncertainty is sure to temper enthusiasm for a while. However, I consider the UK market to be undervalued overall. If I was pressed for a forecast for 2019 then I would suggest 7750 to 8000 as very possible.
My short-term view is cautiously negative, the market has seen a 5% increase within days and is sure to give some of that up soon. But then trading will have a highly charged Brexit background with which to contend.
I do feel that the market could well be knocked for six again in reaction – if that happens a lot more value will become apparent. That will give longer term investors the opportunity to add to their portfolios, whilst also gaining good yield returns.