For the FTSE September starts with its NZ 100 points higher than it was in August but we do feel that this will change and it will move down to 7350-7450.
The timing of this move is critical as it will totally change the complexion of this expiry so really the sooner the better.
However as it stands a quick test of 7250, where it jumps a complete ratio level, would be very useful in determining this expiries level of sensitivity, and as it is a triple then we would anticipate this level here as being the minimum.
Also as it will start in R1 ratio then it will be used to this level so it shouldn’t be more than a speed bump as this expiry progress that is if the zone doesn’t change immediately.
However just a quick glance at the table above will reveal that currently the market is a great deal closer to some significant ratio support levels while the corresponding resistance ones are a long way above it.
For the record the last expiry the FTSE started it at 7452.91 and finished it at 7323.98 for a loss of 128.93 (1.73%) points although it traded between its R1 ratio levels giving a total range of 250 points.
Range: 7250 to 7450
Welcome to the DAX September expiry and hopefully it will have a bit more action to it than Augusts’ which was almost the mirror image of this one.
This was actually a result as it could have got very messy but seemed quite content to bounce off R1 and in the end from the close on the 21st July (12440) to the expiry on Friday (12165) this index lost only 75 (0.60%) points.
We very much doubt this expiry will be so sensitive but on the downside it goes straight from the Y ratios to R2 at 11950 so if it goes there this will prove to be a very significant level.
And as you can see from the table the corresponding ratio level does not appear for a very long way and it is also only as high as it goes so it certainly has the potential to be a cracking expiry.
Range: 12150 to 12250
Type: On balance only just bullish