Nb. Our comment from the 12/21/20
Now the mighty Dec expiry is over, the stark reality of 2021 looms large.
Of course, there is still a shortened week to go for everyone to secure their year-end performance-based fees/bonus’s and the such-like, so this has to be got out of the way first.
Or at least, this has been the case in almost every year we can remember.
This also means the picture painted by the above table could, and probably will change.
But, as it stands, and just one glance should be enough to tell you, that this is not a pretty one.
Every 50-points from 6600 it goes up an exponential ratio level, so if it wants to go higher them’s some serious headwinds, particularly for a January.
Below the zone there is virtually no significant ratio, especially compared to what there is above, which essentially means, no safety net at all.
A saving grace is that we think the zone will move to 6450-6550.
But for us, the best-case scenario, is that this market settles within it, and hopefully just stays there nice and quietly.
Also, don’t get fooled by the level of activity, as when the puddle is so small even a raindrop looks big.
Basically, the world and his brother are all just looking one-way, which seldom ends well for them.
Range: 6450 to 6600
Activity: Very good
Nb. Our comment on 12/31/20
Such a shame really, as it was obvious the FTSE really wanted to go better, and that was before the Brexit announcement.
Monday and Tuesday last week saw this market drop into and then be contained by its zone, which was pretty much what we were hoping for in our last comment written before the week started.
However, the last two trading days of last week, saw the FTSE break out back above its zone.
Evidently in anticipation of a deal, which duly came and set the tone for the resumption of trading on Tuesday.
So, the immediate response was a very healthy jump, the trouble was, is that this jump propelled it right bang smack into the middle of our R ratios.
If you had seen our previous comment then at least you were forewarned, unlike the market, which was very obviously caught by surprise with the futures selling generated by R2 ratio dynamic delta from 6650 and above.
The fact that just one day later this index is now back to Y2 just goes to show how little it was prepared to take on those futures, or at least, so far.
It is now at a pivotal point, a decision moment if you prefer, as we still expect to see the zone here move to 6450-6550.
This means, should this happen, that 6550 is the critical level.
Below it, and it should be safely in its new zone, but, above it, and it has exponentially increasing R ratios every 50-points.
The only difference being, is that the market now knows what’s waiting for it up there.
Range: 6450 to 6600
Type: On balance bullish