The FTSE index was below 5000 from around noon yesterday. After heading towards 4900, a token rally took it to 4914 at close of play. This may well be the start of the City accepting that 5000 cannot be held.

This 3% fall was reflected on other bourses around the world: Eurofirst fell 3%, Shanghai 4%, and the S&P 3%.

Rumours abounded in the US that a Labor Department report due out on July 2nd would show America had suffered a net jobs loss for the first time this year.

There was also widespread concern over weakening growth in China.

Thus, both crude oil and natural gas fell 3.5% – and as a major raw materials producer, Australia saw its dollar continue to drift south, losing 1.6% on the day.

“We’re close to important technical levels on the S&P 500” said James Paulsen at Wells Capital Management – a reference to those points at which major market falls can be expected. The breach of the FTSE’s 5000 level yesterday offered the same sign.

The signs are those which usually precede a tipping point. Overnight, the Nikkei fell 2% to a 7-month low.

Such things are always difficult to call; but my own feeling (first expressed at the start of last week) is that we’re on the verge of an inevitable – and major – correction.