Nb. Our comment from the 07/27/20
Well if you knew where the ratio levels were, you would have nailed the FTSE last week.
To be more specific, not so much the ratio levels, but rather the zone levels, to be more precise.
Monday the 20th was all about the zone’s top boundary, with the market managing to remain just above it, eventually finishing at 6261.52.
Tuesday was just a rerun, with the intraday low of 6253.90, and the close at 6269.73.
Strike three, on the Wednesday saw it capitulate, the market closing dead centre at 6207.10.
Thursday 23rd saw the intraday high of 6273.63, which was a spike, as the market spent the next three and a half hours camped on the upper boundary, 6250.
The break back through the upper boundary failure, significantly, normally means a test at the other end, and we were duly not disappointed.
Although the absolute rubbish that is published on the FTSE just goes to highlight how they like to mask the facts, as officially the open was 6211.44, the high 6211.44, the low 6099.06 and the close 6123.77.
Only two of those are correct, as the open was nearer 6130, and the high was 6160, for about half an hour.
Changes the whole picture, does it not.
So, in reality, the market gapped down at the open, below the zone’s lower boundary, then went on to test it, for the aforementioned half hour, trying in vain to break back into its zone, and significantly failing.
So, if you knew where the FTSE’s zone was, last week was about as good as you could get.
Means this market is now in bear territory, and please see the table above for the levels you need to know.
Range: 5950 to 6150
Nb. Our comment on 08/03/20
Wow, there is so much going on in the FTSE, just as there isn’t in the SPX, bizarre.
As we said, after the first week being all about either end of its zone, last week was all about the Y2 ratio bandwidth.
Really, the absolutely epic battle the FTSE had with 6150 on Tues, Wed and Thu was nothing short of awesome.
And, those that knew it was the bottom boundary of the zone, also knew, and realised, how important it was for this market to extricate itself from bear territory.
The fact it failed, meant the other end of the Y ratio bandwidth was the next target.
Of course, Thursday saw a deep incursion into R1, the intraday low being 5924.70, but as the intraday high was 6145.83, we were not at all surprised it was this deep considering all the momentum it had built up in collapsing 200-points.
Those that have followed this analysis would also, hopefully, have recognised that this was also a ratio bandwidth test.
These almost always, result in a breakout the next day.
So, Friday’s drop was all natural.
However, what isn’t, and is also totally misleading, is this auction obfuscation.
The real time close was 5924.59, so the auction has actually established a new low and close, which is basically not open, fair or transparent, so just wrong, wrong, wrong.
Therefore, worth noting, is that 5900 is only just below the R2 threshold, so had all the markets been open, especially futures, the dynamic delta hedging that would have occurred at this point would have, very probably, not allowed the market to pass it.
And as the open today is the same as Friday’s close, which in real terms it obviously won’t or can’t be, so more obfuscation, but in the real world, today’s proper open is going to be exceedingly important. So, watch 5850 and 5900 very closely, if you can.
Range: 5800 to 5950