Will we see a Santa Rally on the FTSE 100 – or a Christmas crash! The FTSE 100 is pretty much reacting as expected – it bounced off our previous “question marked zone” (where we made a break even long) and has now crashed back through it – failing to make a new high on the way up.
These swings make it very difficult to make low risk/ high reward trades on the FTSE 100 and we still see the best opportunity as a short on our “thick red line” or a long on our “thick white line” which is not shown on this chart but is current at around 6855.
We think the most likely course of the FTSE 100 is a bounce off our question mark zone towards the short entry zones marked by the red circles. We have pushed these zones out a couple of weeks against our previous update – that being said, there is nothing to stop the FTSE rocketing over the next few days!
Risk management, as always, is of paramount importance.
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