Nb. Our comment from the 09/06/21
Here we are at the halfway point of the September triple witching expiry and all we can say is that R2 at 7150 is having an amazingly robust and everlasting effect on this index.
Far more than we would ever have credited it with, and historically far more than it has before in one of the big expiries.
The only conclusion we can draw from this is that it is not the amount of dynamic delta that is producing R2’s longevity, but rather the lack of commitment by the practitioners.
However, what we have seen before, and especially in the third week, is that equities can take control, normally by means of an upbeat note on one (or two) of the heavyweight sectors like Financials, and the resultant jump in their collective share prices tend to get the market up and over this hurdle.
The trouble here is, that just over the R2 hurdle it faces R3 at 7200, and then DR at 7250, and all the while the expiry clock is ticking.
It really is a shame, as there is no doubting it, where all-time-highs are concerned the FTSE is an exceedingly poor relation to almost every other index, scrapping a new one out by less than 10-points, which is pathetic really by comparison.
And whilst mentioning highs, the intraday high on Tuesday 31st August was apparently 7160.49, which was up from the open of 7148.01, but all we saw was an easier open and the market barely troubling 7150 from beneath. The main reason we are saying this is so that there is a record of yet more false data.
Getting back to this week, if 7150 does break, then we could see a deep incursion into R3 as quite often the euphoria of the release is a bit like an elastic band breaking. If it doesn’t then the zone is the target, which is the case in both scenarios, it’s just a question of whether or not there will be one more last hurrah.
Range: 7050 to 7150 or 7150 to 7200
Nb. Our comment on 09/13/21
The FTSE certainly did go for “one more last hurrah” on last Monday, fortuitously the day we posted, as it went on to trouble R3 at 7200 with the intraday high of 7195.62.
To be honest we sought of expected a bit more gusto than that but, upon reflection, what with the meal they made out of the ratio at 7150 then this lack of more fight is perhaps more understandable.
And talking of this index’s nemesis this expiry, 7150 was the crucial level on Tuesday.
The real time close was 7152.75, so to give that up in the auction and finish below it at 7149.37 was very revealing, and the first really significant ratio point last week.
After testing the top of its zone, the very next day, Wednesday 8th, with the intraday low of 7061.13, it was the Thursday that supplied the second significant ratio point.
And there was no mucking about as it was the open, that we had circa 7038, which is again nowhere near the official 7095.53 (but you know already why this is false data), that leap-frogged the market over its upper boundary and into its zone.
Then on the Friday, and we don’t think anyone was left in any doubt about the bullish sentiment seemingly ever-present in the FTSE, as it literally spent almost the entire day trying to get back above its zone’s upper boundary at 7050.
Unless this sentiment suddenly grows a pair, then we can’t see much else than this index staying zone-bound, or at least until the rollover on Wednesday.
Quite often the hugely increased levels of activity generated by the rollover and expiry, even more so in a triple, can be misdiagnosed and used by bulls (or bears) to justify their own agenda.
This may well happen, but if derivatives can hold the index inside its zone for at least the rollover, then there will be a lot of smiley people out there.
Range: 6950 to 7050