FTSE zone bandwidth test on Fri, DAX still to reach theirs, today’s Ratio Table, levels and comment.
FTSE & DAX Ratio Table 7th January 2019
Hope you
were listening in the FTSE as “obviously,
there is still considerable risk, but now we are into a new expiry, and if it
can get back above 6750, then it could become a very rapid ascent up through the
zero-ratio zone to 6900”.
The intraday
high on the Wednesday and Thursday was 6753.29 and 6753.14 respectively, so
Friday would have been strike 3.
However, the
fact that the zone has changed, and the intraday high and low on Friday was
6850.37 and 6692.50, we suspect that this change happened on Friday.
Again, these
ratios should be calculated daily, as that is almost the perfect zone bandwidth
test, 6700 to 6850.
We say,
almost, but really seven and a half points on a six-thousand-point index, that
traded 150-points in one day, is probably the closest you will get to perfect.
Basically, a
drawdown of 0.11%.
This should
result in a breakout today, the only caveat is the DJX, which if you read our
note on Friday you will appreciate how significant 23400 really is, and the
close was above it, but only just, and that is a very large index, so 33-points
is only 0.14%, which is rather ironic considering the above.
For the
FTSE, obviously 6850 is a poignant level, but if it gets above that then there
is still plenty of Y ratio above for it to play around in.
Although, due to the nervousness still embedded in this market, we rather doubt it will be the corresponding R3 ratio (intraday expiry low 6536.53 with R3 at 6550) so be rather wary circa 6950.
Range: 6700
to 6850
Activity: Poor
Type: Bullish
There were
two things we said in our last comment on the DAX that are worth repeating, “this makes 10600 very significant” and “it was the level of activity that caught our
eye”.
The very next
trading day the intraday high was 10612.
Also, as you
can see below, that despite all the closures here over the festive period they
have still maintained a very impressive level of activity.
Of course,
not calculating the ratios daily coupled with a lot of closures makes any form
of continuity here rather difficult, but despite this it has been fascinating
to see their zone hold fast.
When this
index was heading towards 10000 this looked misplaced, but after yesterday it
doesn’t look so awkward anymore.
Using a
broad brushstroke, the two pertinent levels over the last two weeks have been
10450 and 10250, and although the ratios may have fluctuated a little bit they
have stood out, and actually over the last two weeks been counted as well.
The Y ratio bandwidth may have shrunk a bit, but it is still a very impressive 650-points, so don’t expect any quiet days anytime soon.
