FTSE Ratio Table 17th and 29th Oct 2018
The table above shows what the ratios were when we last commented on them during the rollover back on the 17th October, and then in the column on the right as you look at it what they are today.
This may sound a little strange but really the FTSE is acting very calmly and totally in keeping with the “cards” it has been dealt.
By “cards” we mean the ratios and back on the 17th we pointed out that there were 200-points of Y ratio either side of the zone.
The fact that the close on Friday 19th was 7049.80, and hence the open on Monday, the first day of this expiry, is significant as although the zone on the 17th was 7150-7250 we don’t believe in coincidences so it must have or was about to move to where it is today.
On the subject of the previous close being the next day’s open, a London peculiarity, and totally wrong in our opinion, it seems Friday’s intraday high was 7004.16 up from the open/close of 7004.10.
As we had the market in the real world opening down about 60-points this intraday high of 0.06-points just adds another layer to the mockery of the FTSE’s opening level.
Anyway, looking at the ratio table from the 17th then the Y Ratio bandwidth of 6950 to 7150 was the pertinent part, so really there should be no excuses for being surprised by what happened last week. We even had it as our trading range.
Range: 6950 to 7150
Obviously, the main aspect here is the change in the zone, which considering there was 150-points of the minimal Y1 ratio below the old zone is not really a surprise.
Above, we mention the significance of Monday’s open, 7049.80, but last week was littered with other significant levels.
The close on Tuesday was 6955.21 for example, then the intraday low and open (again) on Wednesday was also 6955.21 and then on Thursday and Friday the intraday highs were 7004.10 and 7004.16.
Although, we express our cynicism over Friday’s intraday high in our comment above, and this just highlights why, as in weeks or years to come why would you not think the market had traded as high as this intraday high suggests, but we have no misgivings at all over the intraday low which was 6851.59.
To further highlight the incorrect picture this open and close peculiarity paints we made the open down about 60-points, which would have placed it right on R1 at 6950, but which side of it was the important part, but no one will ever now know.
Of course, we suspect it was below 6950, as the market move down to R2 was the inevitable outcome.
This now makes 6950 a significant level, but a lot will depend on what the Street does, but as things stand so far, the FTSE is acting totally rationally and exactly as we would expect considering the huge amount of Y ratio that was, and still is, around.
Range: 6850 to 6950