Today's Business Section -- London UK Telegraph Bearish Wall Street analysts predict a fall of up to 20pc By Ambrose Evans-Pritchard (Filed: 14/08/2006) A clutch of Wall Street's top technical analysts have turned starkly bearish on the US equity markets, predicting a fall of up to 20pc in main indices over coming months. Traders work on the floor of the New York Stock Exchange The chartists are issuing ominous warnings about the Dow Jones industrials and the broader S&P 500 index, despite their relative resilience through the May-June global rout and through the monetary tightening of the US Federal Reserve. Louise Yamada Technical Research Advisers warned that the market was exhibiting all the signs of a slow-motion breakdown. "This is not a healthy rally," said managing director Ronald Daino. "We're seeing 'black holes' where stocks are hammered on slightly disappointing earnings. The last time we saw anything comparable was in late 1999 and early 2000 before the bubble burst." The technical analysts said the Nasdaq index of technology stocks had already "broken down" and was a clear sell. Technical Research Advisers have now extended their sell warning to the more sedate S&P 500, noting that the 50-day moving average has dipped below the 200-day average - a key trigger used by hedge funds and institutions. Mr Daino said he expected the S&P 500 to drop up to 20pc before it is safe for bulls to return. A slide of such magnitude would drag the FTSE 100 and other global indices lower. Much of the technical fraternity view the summer bounce - now looking exhausted - as a "suckers' kickback rally", citing the steady decline in the broader indexes of smaller stocks. Jeffrey A Hirsch, editor of the Stock Trader's Almanac, said that over the last 30 years the S&P 500 had on average peaked two months before the end of the Federal Reserve's tightening cycle - a moment probably reached last week when rates were held at 5.25pc after 17 consecutive rises. He said the markets had a classic "domed top" that pointed towards an ugly autumn. He said the Nasdaq tech stocks had suffered two sets of falls of eight consecutive days this summer, an event not seen even during the dotcom bust. "A burgeoning bear market is now underway," he advised. Ralph Acampora, managing director of Knight Capital Group and one of America's most revered technical gurus, said he expected a nasty slide of up to 25pc in the main markets over the second half. Comstock Partners in Atlanta cautioned against jumping back into the markets for a relief rally following the Federal Reserve's pause. "In the last 53 years there have been 12 periods where then Fed has engaged in a series of rate increases. In 10 the S&P 500 declined after the final rate increase."