FTSE & DAX Ratio Table 10th August 2018
As we have already seen the FTSE go from R1 above the zone to R1 below the zone (7751.10 to 7549.34) all we need now for a perfect expiry is for it to finish in its zone.
In fact, the recovery all the way back up to re-test R1 above the zone is totally normal and as we said earlier, actually expected.
However, calling the zone is going to be the tricky part because as one can see from the above table the ratios are storming ahead below the zone, so much so there is no Y ratio left at all.
In fact, mostly the levels have stayed the same just the ratio level has gone up a level.
To add another bullish signal the ratios above the zone are in (almost) full retreat, which does raise the question as to why this market had so much trouble with 7750.
It was obviously still R1 on Tuesday as the market camped out on it for a full hour before capitulating and giving up 35-points.
Then on Thursday it gave way, but only after the fourth test, however what was more revealing was that several hours later the market came back for a kiss before ending well above it.
This is the last day before the rollover, which is into the Sept triple, which is also a 5-weeker, so it should get very exciting, and we can’t wait to see where Sept’s zone is.
Range: 7700 to 7800
There is no disguising the fact that the DAX is as dull as dishwater at the moment.
We did have a bit of excitement on the Tuesday after our last comment with a range of 177-points, but in the end, it finished just down 17-points.
This is perhaps all the more disappointing for two reasons, the first being that it is in the middle of a 300-point Y ratio bandwidth, so it should be whipsawing around.
Of course, we saw the previous week it tried so hard over several days but failed to breach 12850, and the trouble is it now knows what is there and is evidently too scared to go back.
Which covers the second reason, as having copied the DJX for so long when they eventually breached their resistance level, 25500, the DAX did not take advantage.
Again, still hardly any changes in the ratios, so whether or not it wakes up for its rollover remains to be seen.
However, we suspect it will react to others, especially having so much tolerance currently built in, rather than take the lead itself.
Don’t forget the new expiry here is always slow to start, on top of which it is a 5-week one, so we don’t think that Sept will unduly influence the rollover here.
Range: 12550 to 12850
Type: On balance just bearish