FTSE needs to stay zone bound.

Nb. Our comment from 04/26/19 (Not published online)

Despite the fact we last published on the 15th here in the FTSE it has only been seven trading days, but, of course, in those seven we have started an entirely new expiry, May.

The fact that this market is inside its zone is a very good thing we feel, giving it room to breathe and move, without having to test any ratio levels.

It was interesting to see the intraday highs on the first two days of this expiry being 7528.93 and 7523.79, which, as you can see from the table above, is tantalisingly close to a test of R2.

This is made all the more significant as that is a big jump from the minimal Y ratio straight into the mid R ratio, which don’t forget are exponential.

The real aspect to watch out for is any breach of the bottom boundary, at 7350, as that is an awful lot of Y ratio below there.

All the way down to 7050 in fact, a rather worrying 300-points.

Also, noteworthy, is the similarity to the SPX, in that there is a lot of Y ratio below their zone as well.

Activity, especially for May, and it being an intermediary to intermediary expiry, is surprisingly high, but, overall, it is still a very lopsided expiry and one that is still very underdeveloped.

Range:            7350  to  7450

Activity:          Very strong

Type:              Neutral

Nb. Our comment on 04/30/19

Already it seems the zone here in the FTSE is having a major impact.

On Friday last week the intraday high was 7442.39, and we are more than happy to call that strike one of the zones upper boundary.

And, yesterday, the market basically camped out on it for the last two and a half hours of the trading day, so definitely strike two.

For the record the actual intraday high was 7456.49.

Interestingly, the ratios above and below the zone have slipped.

Below R2 slides to 6900, whereas above both R3 and DR move out by 50-points.

Nevertheless, the situation remains the same, as in we believe the best place for this market is in its zone (7350 to 7450), as above it R2 is still waiting to ambush it at 7550, whereas below we don’t even see the R ratios start until 7050.

So, all in all, if it can hold within its zone, we think it will be doing well, as if it gets aggressive it could easily get a bloody nose, and if that shakes loose the bears then it is a long way down before it will find any ratio support.

Range:            7350  to  7450          

Activity:          Moderate        

Type:              On balance not bullish            

April 30th, 2019 by