It has been probably a bit too long since our last comment, especially as there have been so many changes to the ratios.
The real biggie, is the fall in the zone to 7400-7500 of course.
We didn’t see that coming, although without calculating the ratios there is naturally no way that we could have.
More importantly, without knowing when that, or the other ratios changed, means we can’t really comment on any market interaction.
However, the last two days activity around 7500, the top of the zone, now makes sense.
There are going to be a lot more twists and turns here for sure, especially as the rollover is upon us next week.
Suffice it to say, that with the Y ratio bandwidth now stretching from 7250 all the way up to 7650, the FTSE has ample latitude to do almost anything.
The only perplexing aspect is why it isn’t putting down moves like the DAX.
One point that is worth remembering, is that over the first three days of this expiry, this index couldn’t break up through what was then the top of its zone, or 7650, which, as you can see is now R1.
Which is also the top of our range.
Range: 7500 to 7650
Type: On balance decently bullish
Nb. Our comment on 02/21/20
As we said in our last comment; “The real biggie, is the fall in the zone to 7400-7500 of course”.
Furthermore, we also pointed out; “However, the last two days activity around 7500, the top of the zone, now makes sense”.
The point of repeating this is the fact on the very day of our last comment, this market’s intraday high and low were 7534.37 and 7406.94, before closing at 7452.03, right bang slap in the middle of the zone.
The next two days saw intraday lows of 7403.69 and 7409.13, two more test of the bottom boundary.
So, no surprise day three closed below it, Tuesday 18th, but respect for the recovery the next day, to close at a rather coincidental 7457.02, middle stump again.
It will be rather interesting to see if it can hold its zone for the actual expiry today, but the last hour or so is rather academic, especially as the triple witching March is overshadowing everything.
Our reading of the Feb expiry is that the FTSE has been zone bound throughout, initially getting knocked back when the upper boundary was 7650 at the very start, then since its moved to its current level, it has been there or thereabouts.
The only shame being that we weren’t watching to see when it did make the actual move.
Basically, bit of a lucky escape really, as the ratios have weakened below the zone, with the appearance of Y1, so it could have been an awful lot worse, if you’re a bull that is.