What a fantastic save by the FTSE yesterday, impressed us at least.
The low was 7357.77 so no doubt a test of the lower boundary and it was not so much the resilience and desire to stay in its NZ shown but that it did so when the rest of Europe was in freefall.
It is the rollover today so it has pretty much achieved the perfect expiry from the high of 7561.07 which was R1 and the top of its NZ then, all the way down to R2 at 7300 (low 7303.46) then finishing back in its zone for the rollover.
The only slight fault is it was R1 to R2 rather than identical levels, but as R1 was at 7350 when the market hit its low there was not a lot in it.
Range: 7350 to 7450
Actually one of the reasons that this is becoming a textbook rollover is we have not seen any evidence of the “amber gambler” this expiry, so no sudden last few days large trades distorting things effectively.
The ratios are pretty much better across the board in August so below the zone most levels have come in slightly whereas above the zone we have lost R2.
After today we get the grey area where neither and yet both expiries are in charge and if the market has been held inside its NZ then this pressure is released so it should be interesting over the next few days.
Range: 7250 to 7450
Type: On balance bearish
As we said in the DAX yesterday; “the low was 12542 so this was a test of the lower boundary making yesterday’s range (high 12656) a NZ bandwidth test which would ordinarily result in a breakout today”.
Furthermore the previous day we mentioned it had achieved their zone too early resulting in three closes very tightly grouped (12626, 12641 & 12631) and then Monday’s at 12587 and that is a very tough ask to hold such a big index inside a 0.80% range for so long.
No changes in the ratios today and being the rollover it will be a tough task to get it anywhere back even close to its zone.
Range: 12300 to 12550
Type: On balance just fractionally not bearish
No movement in the NZ here and the signal has if anything reversed, but still early days as the ratio here is most certainly a work in progress.
However with all the excitement going on in July it may be worth considering that here all the market has done is move around within its Y1 ratio bandwidth, and not by very much considering how wide it still is.
Like London the range here in July was not like to like as it peaked at Y2 when it was 12950 (high 12951) and went on to test R1 at 12300 (low 12316) and now only time will tell if it manages to regain its zone today, but it would be a shame having worked so hard over the previous 4 days up to Tuesday.
Range: 12300 to 12650
Type: On balance just bearish