Nb. Our comment from the 04/28/20
Well it is a textbook market at the moment.
Three very solid attempts to breach R1 at 5850 throughout the day, each one lasting a good fifteen minutes, so not just spikes.
Obviously, didn’t quite have enough, and, as we said, we thought it would be a stern test.
Then, in the last quarter of an hour of real time trading, the market got back up to 5829.49.
And, our old friend, the auction, took it back up to within spitting distance for tomorrow.
However, the most important aspect for us, is that the bulls are very evidently back, and, more to the point, willing to take on R1 without running away scared.
The only ratio to change, is R3 below the zone.
The implication of this, is not that it is static, but rather the zone could still easily be 5550 all the way up to 5750 (apologies for the typo on the 24th when we said 5650 to 5750).
So, make no mistake, there is still a considerable risk out there, but at least it is a far more balanced and rational market, at present at least.
Range: 5750 to 5850 or 5850 to 6050
Type: On balance only just bullish
Nb. Our comment on 05/04/20
What a fantastic week, or at least it should have been, if you knew where the ratio levels were.
It was a textbook set-up, to get above 5850, and after a hesitant start last Tuesday it blasted straight through.
Which is why we published two trading ranges, the second being on the assumption that the market would do just this.
What we didn’t expect, was for the market to use up virtually its entire 200-point trading range in the one day.
On the Wednesday it also went straight through R2, which was rather punchy at the time, especially under current conditions.
This left R3 as the next line of resistance, at 6150, and on Thursday the market hit it, with the intraday high of 6151.58.
This they couldn’t ignore, and the turn around was as if it had hit the proverbial brick wall.
The ensuing 253.61-point capitulation was very impressive, to say the least.
Friday, saw the intraday low of 5746.06, which is the first test of the top boundary of the zone.
It would make sense for this market to try and stay inside its zone, where it is in neutral territory.
The problem, may well be if it tests the lower boundary, as hopefully it will hold, but if it doesn’t, this market will be back into bear territory, and that is an entirely different matter completely.
Range: 5650 to 5750 or 5750 to 5850