FTSE & DAX Ratio Table 9th Oct 2018
And we didn’t have to wait for very long in the FTSE as the day after our last comment it broke their zones bottom boundary.
Sadly, this of course meant an end to the 100-point trading range that had been in force for the previous two weeks, but the low and close on that Thursday 4th Oct really did not do justice to the titanic battle that this index had with 7450.
But, once broken, that was the writing on the wall, and although 7350 was, and still is R1, it is barely above the threshold, so at best a very weak R1.
The real test was yesterday, at R2, and the market did bounce 15 to 20-points after its initial encounter, but once that failed and it was tested for just the second time it crumbled.
This is not good news for the bulls as that was rather pathetic for R2, which really should have put up much more of a fight.
Next up is R3 at 7150, and as this is an intermediary expiry we are now getting into some serious ratio, so hopefully it will put up a bit more of a battle.
Range: 7150 to 7250
Activity: Very poor
Type: On balance bearish
The change in the DAX ratio table above looks a lot more dramatic than they actually are.
As essentially all that has happened is R1 has become Y2.
There are two ramifications of this, and the first and most important is that it makes R2 at 11950 a very significant level.
Secondly, it means that the Y ratio bandwidth below the zone is now a very impressive 400-points wide.
So, if R2 holds then the rebound could be more spectacular than the fall, so the open today is going to be critical.
It is a very close call, and just 3-points on a 12000-point index is virtually insignificant, but it really does not leave any room for error.
At least here it put up a decent fight.
All in all, it is looking like it is going to be a very exciting rollover and expiry next week.
Range: 11700 to 11950 or 11950 to 12350
Type: On balance definitely bullish