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
Nb. Our comment on 05/13/19
As you can see from our comments above,
back on the 30th April, the market was all about the upper zone
boundary at 7450.
At that time, we hoped it would stay
within its zone, and it almost did, as the remainder of that week, it was all
about the lower zone boundary.
The intraday high on the 30th
was 7451.32, then on the 1st it was 7446.46, followed by a spike
down to 7339.45 but the close on the 2nd was at 7351.31, and most of
that day was spent in or around the lower zone boundary.
The intraday low on that Friday was in
fact 7350.01.
Of course, our fear about breaking out
of its zone was because back then it was all Y ratio down to 7050.
Needless to say, the ratios evolve, so
in the two weeks since our last comment you can see how much it has changed by
just comparing the two tables above.
It hasn’t quite got down to 7150, and it
would be nice if it did, but after the SPX got as low as 2825.39, incredibly
close to where we had our R1 and an astonishingly close call considering we
stated that was our level for the bounce when that market was nigh on 2900,
before finishing up 11-points at 2881.40, we suspect London has had its chance.
This week it’s the rollover, so the focus should be on recapturing its zone, so our old friends and acquaintances 7350 and 7450 will, or should be, back in the frame this week.
