As we said on Friday “again, this madness about the open”, this time however we don’t think anyone really believes the market actually opened at 7695.88 as in the real world it was easily above 7700.
Also, we did mention R2 “was looking fragile” and so it proved, the surprise is that it is still at 7700 and not 7750, which trading wise should be the next hurdle, and should in fact make the trading range 7600 to 7750 today.
The ratio table above has lost Y2 both above and below the zone, and the ratios are weaker around the market level, but at the end of the day, and although London is easily the poorest performer among the indices, it is still battling R2 which is very aggressive not to mention unusual for a Jan expiry.
Range: 7700 to 7800
We did fixate a bit on R2 on Friday but on the ratio table Y2 at 13350 was plain for all to see, so no real surprise that having leapt 165-points the high was 13332.
Interestingly Y2 has come in today, meaning it has actually leap-frogged the market, which does make R2 the next level.
In bull markets the indices tend to go from the NZ up to the R ratios and then follow them while they retreat, the reverse being the case for bear markets (NZ and down), but so far, this expiry the DAX is acting like a range bound, or trendless, market, which is one that bounces between the R ratios, and is normally the state of markets that exist for the greatest length of time, this age of QE being the exception.
Nevertheless, this does make the DAX the odd one out, but we will soon see at R2 we suspect.
Range: 13050 to 13450