We have seen the change today in the FTSE that we were explaining yesterday which just highlights the ongoing issue this market has with 7550.
This actually makes 6 tests in a row at this level and we appreciate our strike 3 rule but this is not always the case, which perhaps someone could point out to the DJX.
Having seen what we suspected was our “amber gambler” appear on the last two days of last week, which is early to be fair, we saw no evidence yesterday but there is plenty today.
The end result is the FTSE now has a wider ratio bandwidth to play in and 7500 could very well be the target for Friday.
Otherwise we must mention the last 3 auctions which have seen falls of 16.72, 8.38 and 15.56-points respectively, but more importantly when combined with some weakness in the closing minutes have kept this market well away from finishing anywhere near 7550.
Range: 7450 to 7550
It does look as if Oct is going to miss its zone for the rollover today but it is in the perfect position for this expiry, November.
The only ratio to change is R2 below the zone comes in slightly but perhaps the most important aspect is that the trading ranges are the same but for different circumstances.
However, Oct went from R3 below its zone to above it which if that happens here as things stand that will be an absolutely epic trip.
Range: 7450 to 7550
It was such a surprise to see some red in the DAX that we thought we would check and surprisingly this was only the 5th down day this expiry, and it is a 5 week one.
Actually, the market closed up in real time so we are not sure this even counts as it was the auction that turned a close of +15.11-points into a negative, which was a big move for this index.
The ratios are weaker across the board, more so above the zone, but we would fully expect to see a further move up in the NZ and most probably to envelope the market.
Bit of a cope out we feel but in an efficient market one or the other has to concede.
Range: 12850 to 13250
Judging by the changes in the November ratios we have no doubt this expiry will emulate October and see a move up in their NZ.
However, this is a cause for concern as this index is now just a few days from being the alpha and yet we are seeing Y2 and R2 above the zone slipping.
Of course, we were getting used to it in Oct but to start so early and when there is so little in the first place this is not good, but potentially very bullish, although unless it fills in underneath it will still be balancing on that cliff edge.
Range: 12750 to 13250
Type: On balance bearish