We can start to think about sharing in the good times once more

The weeks since US president Barack Obama upset the markets with his populist banking outburst have been marked by turbulence, but it now looks unlikely that we are in for the "double-dip" crash that suddenly looked a possibility.

At some point, the current market levels will have to be broken decisively. On the FTSE this level is about 5,300. The 5,300 level is the middle of a band of 5,000 to 5,500 and crudely represents the value of the market before the crash of the autumn of 2008.

This 5,300 level is, in effect, the ledge at the edge of the precipice that the world fell off when Lehman and AIG went belly up. So this level tells us that we are still on the edge of that abyss, but thankfully not actually falling into it. It tells us catastrophe is averted, but that we are not necessarily safe yet.

It also tells us that investors, whose opinions as an aggregate are represented by the FTSE index, do not know whether we are in recovery, on hold until further notice or about to plunge back into the economic void that was late 2008 and early 2009.

The market does not see the future; it merely calculates the value of all outcomes as foreseen by its participants. The market is able to demonstrate huge swings because the consensus can change dramatically. Anyone that can do a better job of clairvoyance than the mob can do very well indeed.

As the market is kind of shrugging and wondering what lies in store next, we can do the same and I believe the market will rally some more.

I'm a bull by nature and I am slightly optimistically looking for another leg up. However, the market is fragile at the moment and there are plenty of wobbles in the system that will need to be ridden over. As we have seen with the Dubai scare and now the bubbles in Greece and the effect of a truculent Obama on the world's markets, it doesn't take much for the jitters to set in and spoil the picture. Even so, the trend is still a recovery rather than a double dip.

Tightening is going to come soon enough and that will create a short but nasty bear market. However, after that has worked itself out, with what I see as a long period of sideways trading, we can look towards the beginning of a long rally indeed. This is the sequence I am expecting over the next two to five years. As in most difficult markets, it will take a fair amount of independent thinking to do well.

For several years now my model has been that we are back in the Seventies – oil shock, commodities boom, market crash, war in the Middle East, third rate politics; it's been clear to me for a long time we are back to the future. The Nineties were so Sixties, and the Eighties the Fifties. In my mind, market cycles can be generational; one generation echoing the one before. In 20 years it will be the dotcom boom all over again; the same story but a different setting.

But we can't stay in the Seventies forever. This kind of pattern is driven by generations and as the baby boomers start retiring, we will flow into an Eighties environment. The Eighties, of course, were a golden age for equities and for any number of reasons this is what I see coming again, once we have ground forwards a few years.

Clem Chambers is chief executive of stocks and shares website Advfn www.advfn.com