Well it has certainly been bit of a
quiet start to the May expiry, although things could become far more
interesting now the market is just below a test of R1.
The only change in the ratio above the
zone is Y2 comes in ever so slightly.
Below the zone there are two changes, Y2
comes in to 2815 and R1 to 2775.
However, neither of these are
significant enough to change the overall picture as there is still a sea of
minimal Y ratio below the zone that stretches for 120-points.
Don’t forget, when you add in the zone
itself and the Y ratio above it that is another 60-points.
So, the fact remains, this market
remains very susceptible to any shocks, to the tune of almost 6%.
First things first, and a test of R1 at 2955 would go a long way to establishing what this market really thinks, as bumbling around in the Y ratio like it has been, doesn’t mean anything, well apart from a large degree of apathy.
Type: On balance bearish
Nb. Our comment on 05/09/19
A lot has happened since our last note,
most notably was the test of R1 at 2955, with the intraday high of 2954.13 on
the 1st May, followed swiftly by someone saying “boo”.
For those that had taken a note of our
last ratio table then they would have seen the normal pattern emerge.
Being, down to the middle of the zone,
intraday low 2900.50 before a decent recovery, but knowing where R1 was, not
going there again.
Then, this week it has all been about
the zone, intraday low on Monday of 2898.21 was a test of the lower boundary,
please don’t forget the Vega as the open was nigh on the upper boundary and
that represented a drop of 36.75-points in itself.
2895 and 2905 saw considerable action
the next day, but didn’t provide any highs or lows.
The most significant aspect that day was
the close at 2884.05, just a smidgen shy of their lower boundary, but still a
close in bear territory (i.e. below the zone).
Reinforced by the intraday high on the
following day, Wednesday, being 2897.96, a valiant but ultimately a failed
attempt to recapture the zone.
Which brings us neatly around to today,
and it is really good to see the ratios below the zone improving, and perhaps
no surprise the intraday low yesterday was 2873.28.
This makes Y2 critical today of course, but for us, our eyes are on the corresponding R1 ratio level now at 2815, as that for us will be key.