This is the headline that you could be reading within weeks.

Earlier this year we sent the following chart to our clients entitled 'Different Markets - Same Shape' comparing the Nasdaq bubble to Japan's Nikkei 225 bubble of the late 1980's:-

  
You will note an uncanny resemblance between the two, with Nasdaq following the pattern of the Nikkei.

We are of the view that the Denial Phase, when most market participants deny that anything fundamental has changed, has ended. Having fallen by 35% during the Denial Phase, Nasdaq experienced a retracement rally (as did the Nikkei) up to the 4200 level, since when it has fallen once more.

Markets do not travel in straight lines, either up or down but certain patterns and cycles can be identified. Investors should consider that the Fear Phase, which appears to have commenced, is likely to take Nasdaq down to the 2300 level, some 55% fall from the March 2000 high and possibly lower thereafter.

The more widely followed indices, such as the Down and FTSE 100 are unlikely to ignore Nasdaq's falls for much longer so wider implications are likely.