Primed to catch the next big move of the FTSE100!

I’ve been watching the FTSE 100 like a hawk over the last few days. I suggested recently that the current market could present a very low risk shorting opportunity. My logic was simple. Given how close we are to the all time high, even if I am caught on the wrong side of the trade, I can tightly manage my stops and, once it is clear the market is against me, simply flip and switch direction. The latest tentative action on the FTSE has been almost perfect for this approach and the next few days are now crucial.

Best Times to Trade the FTSE

The FTSE 100 has tried and failed on at least nine occasions over the last two years to break its 6,950.6 record, set in December 1999. However, the latest assault on that lofty peak has been the most tenacious, even if a little hesitant, and today Britain’s leading index hit an intraday all time high of 6,958.89 towards the end of the session. But…

…no sooner had the FTSE100 breached its glass ceiling it pulled back to close at 6,949.6, just shy of that fifteen year target!

As things stand, the market looks determined to make this the time that the lagging FTSE100 joins its record breaking global peers and presses on into unchartered territory. Once that 6,958.89 limit is breached and held on an end of day basis, it is a short hop, skip and a jump to 7,000. Beyond that, we could really see some fireworks. As I commented last week “Markets love big round numbers just as much as they love breaking long-standing records.”

Once 7,000 goes it is entirely feasible that the FTSE100 will add five per cent or more within weeks, no matter what bearish clouds are gathering.

So why is it that I am sticking with my short?

The simple answer is because I am not wedded to this position. Once committed to a failing trade the most difficult thing can be to recognise and then accept one’s mistake. The psychology of this is fascinating, the stress it can bring less so.

This is why I love the current market so much. I feel entirely relaxed about it. Up, down, who cares!

Tight, disciplined leverage should win this day and once the market does make its move, I should be paddling nicely, ready to catch that wave.

IMPORTANT: The posts I make are in no way meant as investment suggestions or recommendations to any visitors to the site. They are simply my views, personal reflections and analysis on the markets. Anyone who wishes to spread bet or buy stocks should rely on their own due diligence and common sense before placing any spread trade