First look at the FTSE ratio’s for this years first triple expiry.

DR Ratio ready to pounce on an unsuspecting FTSE.

 

Nb. Our comment from the 02/15/21 (Not published)

 

Nb. Our comment on 02/22/21

 

A very big hearty welcome to the first triple of the year.

And for those that still harbour any doubts as to the significance of these “biggies” then just cast your mind back to this time last year.

As everything goes up by some considerable way, it is therefore totally natural that so should a markets sensitivity.

Although, even having just said that, being sensible about it means that it does normally take a bit of time for the market to get used to everything getting so much bigger.

By way of a more practical explanation, with DR lurking ready to pounce on an unsuspecting market at 6650, we would fully expect this to be far too much dynamic delta for the market to absorb.

Or at least, in the first few days, as once this expiry gets going, then these triples have historically traded between the DR and even B1 corresponding levels of ratio.

And, even if it just trades between the DR levels, then this still gives you a potential trading range of 6650 all the way down to 6100, as things stand.

Of course, things may change, and significantly so, but at first blush this is not looking like a happy expiry for the bulls.

Therefore, it is probably welcome news that at least this one is a normal 4-week trip.

This is not to say we can’t be wrong, but the slap in the face R2 gave to this market at 6800 (Feb and also aided and abetted by the expiry), suggests that the futures that will come out onto the market by an exponential ratio level two notches above this will be very hard to digest. Not unheard of, just unlikely in our opinion.

 

Range:            6550  to  6650       

Activity:          Moderate

Type:              On balance bearish

 

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February 22nd, 2021 by