From R3 back to its zone for the FTSE in just 4-days, nice.
Nb. Our comment from the 08/27/19
As we said the FTSE, “was just the proverbial accident waiting to happen, and those who were aware of the ratio levels should have, at the very least, bought some insurance, so as not to be caught out” way back on the 5th August after the market had eventually breached R2 and went on to challenge DR and even B1 levels of ratio.
Mind you it has certainly been ably assisted by the US President lobbing more economic grenades into the mix.
Looking specifically at the FTSE the shoe is now on the other foot, and, probably because of the distances involved now, it seems that where once it used to do this in an expiry it now looks like it takes two.
So, from DR last expiry to very possibly DR this expiry.
The caveat is that this is a five-week triple expiry.
Also, the ratio alignment is very different, so R3 now kicks in at 7050, so from there on down the ratios are not to be sniffed at.
Assuming that is, a certain person, doesn’t switch from hand grenades to mortar rounds.
Anyway, at least you now know where and what the ratio levels are, and therefore a rough indication of how much futures buying will occur at those levels.
How the market reacts to this is another story entirely.
Range: 7050 to 7150
Activity: Very poor
Nb. Our comment on 09/03/19
Well you just won’t get a better example of the ratios in action than what happened last week, on Tuesday and Wednesday.
Don’t forget London was closed last Monday, so the Tuesday was the first opportunity to react to the previous Friday’s massive drop of 623-points on the DJX, despite the fact it finished the Monday up 270-points.
The FTSE hit R3 at 7050, which was a big jump up from R1, again, please remember these ratios are exponential, hitting the intraday low of 7044.73.
On the Wednesday, reacting to Wall Street’s overnight reversal, the FTSE’s intraday low was 7050.00.
You just can’t get more precise than that.
The only change in the ratios below the zone, is that Y2 drops to Y1.
The only change above the zone, is R2 moves up to R3, which now therefore starts at 7450.
Of course, the real change is the actual market, as that is now back within its zone.
That’s a very impressive leap up of 250-points, 3.55%, in just 4-days.
We would like to see it hold inside its zone, for at least a few days, but it will be a tough ask, especially with so much Y ratio still around in the US indices.
Also, there is still three weeks to run in this expiry, which is a biggie, so it will only get more volatile towards the end, so a quiet week now would be handy.