Q and A: Why short FT100 and not DAX30?

FT100 short was a winner

I was calling for short FT100 weeks ago. The results so far: 3 out of 4 targets hit. As a reminder, this was what we took away from the chart on 08 December.

FT100 daily chart (2)

FT100 daily chart (2)

And this was subsequent price action.

FT100 targets 2 and 3 reached last Friday

 

Now reader Phyllis asked this question

 

When you short, you short the weakest

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FT100 overlaid with DAX30 and CAC40

When you want to short you are betting on weakness. So you short those that are already very weak and not those that are strong for whatever reasons (unknown to you and I).

Dear Phyllis, this is the concept of relative strength. When you pick a fight, you pick the weakest guy.

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