CAC 40 Index futures forecast for the week of December 17, 2012, Technical Analysis

The CAC 40 Index had a strong week as we smash through the €3600 level. We have decisively broken out now, and we believe that this market will head to the €4000 level before it’s all said and done. Because of this, we are obviously bullish and already long of this market.

We think that any pullback to the 3600 level will now find quite a bit of support, and would be an opportunity to add to our position. As far shorting is concerned, we would have to break down below the €3500 level to even contemplate that at this point time. There have been so many large hedge funds around the world short the French markets that it appears this short squeeze is really starting to put momentum back into the CAC 40.