FTSE Oct to Nov Rollover 16th Oct 2017
Five-week expiries always feel a long time and this is no exception but here we are at last entering the rollover and expiry week.
They did a very admirable job on Friday in the FTSE clawing all the way back up to R3 which was then at 7550 by the close only for some reason to take their foot off the pedal.
The auction wiped off a massive 16.72-points and basically undid all the hard work as that is roughly where we thought the market actually opened, rather than the misleading official level.
As one can see today it is all change but the rollover influence should start to kick in and we would therefore be expecting it to gravitate towards its zone for Wednesday.
However, it seems like the “amber gambler” may be back in town and if our suspicions are correct then we may be looking at 7500.
Range: 7450 to 7600
The first look at how the November expiry in the FTSE is shaping up is interesting as we get the welcome return of some Y ratio.
At the moment the zones are in sync but from what we are seeing it should move to 7450-7550 and possibly as soon as tomorrow.
Otherwise it looks fairly evenly balanced in respect of the depth of the ratios but with so much Y ratio around there is the mouth-watering possibility of a trading range from 7150 all the way up to 7650, but we stress it is still very early days yet.
Range: 7450 to 7650
Type: On balance decidedly bearish
This will be a big week for the DAX as it has to decide whether to be compliant or fall prey to the excitement the increased level of equity activity this period generates.
This will be a lot harder than it appears as this index toyed with its NZ for the first three days of this expiry then has steadfastly been above it for the remainder, so far at least.
The ratios have begun to move up below the zone at last, but more importantly they have strengthened above it with R2 coming in to 13300.
However, the last three closes have been 12970, 12982 and 12991 which is bizarre with it being amid so much minimal Y ratio, so add the rollover into the mix and it makes for a very potent brew.
Range: 12850 to 13150
Type: On balance only just bearish
The first aspect we noted for the November expiry was the difference in the NZ.
The second aspect was (again) how little ratio there was, so combine these two and it will sort itself out for sure.
We must of course point out that this index is a notoriously slow starter so this low level of ratio is normal, but also this is one of the only 4 expiries that are back to back intermediary ones and so by definition are lower than others, which are all book-ended by a triple.
Range: 12750 to 13250
Type: On balance just fractionally bullish