FTSE & DAX Ratio Table 10th Sept 2018
It has been some considerable time since we last commented on the FTSE, but rather than reference the 29th August we would like to take you all the way back to what we said on the 14th August, almost an entire month ago.
A couple of little bits of housekeeping first in that although the above table looks unchanged from the 29th it has actually evolved and then returned to its original state.
Also, the market, in this expiry, never got much past 7600 as this ratio had turned to R1, which it found difficult to cope with and was mentioned at that time.
Furthermore, although we stated 7350, and the market did bounce very well off it on the 5th September, there is a considerable step-up in the ratios at 7250, which is where most of yesterday’s action took place.
Anyway, here are our comments from a month ago, and be honest, how improbable then did you think our range was?
“The really big issue is the zone, which is down at 7450-7550, which means August’s best bet is to aim for Wednesday and then just take the foot off for the last two “grey area” days.
However, when it gets going, below the zone the ratios jump from Y2 to DR at 7350, so that is a good, solid support level.
On the other side the jump from Y2 to R2 at 7750 will cause problems, but it is a triple, so a lot will depend on what the other markets are doing at the exact moment this index hits this level.
Behind that there is DR at 7850, which again is a far more solid level.
Overall it is also worth remembering that if it really does get animated, which we haven’t seen really so far this year, then triples can be B1 to B1 affairs.
Regardless, the potential for this expiry in the FTSE is 7350 to 7750/7850, which is a big range for this index”.
Range: 7100 / (7250) to 7350
Activity: Very poor
Here is a little reminder of our last comment in the DAX; “well, in truth, the surprise was only for those who were unaware of how the ratios were aligned for this expiry….Our minor disappointment was we never saw a test of 11950, which has today changed from DR to R3, as that would have been really spectacular….However, it seems R2 at 12150 proved admirably up to the task, with the last three lows of last week coming in at 12120, 12168 and 12135 respectively”.
And we certainly got our 400-point bounce all the way back up to its zone, where it bounced around for all of the second week.
However, the writing was already on the wall as we had seen 11950 drop from DR to R3, and as you can see from the table above it is now just R2.
Although, having said that, the intraday low on Thursday last week was 11944, so it was just as up to its task as it was back at the start of this expiry when it was at 12150.
The intraday low on Friday was 11888 so if it was left to its own devices R2 and R3 are evidently enough dynamic delta providing ratio to make the market sit up and listen.
The fact the real time close was 11950 is yet another one of those coincidences we so don’t believe.
The ratio alignment here still remains lopsided, but not nearly to the same degree anymore.
Furthermore, we still stand by our assessment that this index will be where the excitement will be, although London is certainly giving it a run for its money.
Range: 11850 to 11950 or 11950 to 12050