September 20th, 2021 by Richard

The FTSE even starts the Oct expiry in bear territory.

 

Nb. Our comment from the 09/17/21 (Not published)

Nb. Our comment on 09/20/21

 

Turns out that there was just one last “hurrah” in the September expiry, and with the EDSP of 7031.68 it was all about the zone at the end.

Which is really what is all about in the October expiry as well, as here the zone is now 7000-7100, which is in fact slightly higher than it was in September.

This does however throw a degree of confusion over whether the support at 6950 on Friday was down to the hangover of Sept’s bottom boundary, or an early test of R1 in Oct.

Either way, it held firm, but it remains a very critical level in this expiry, meaning the first couple of days could decide the next 4-weeks.

If R1 doesn’t hold, and if you compare the two tables above, it has only very recently become R1 from Y2, then the market will find itself in a 250-point wide bandwidth.

Of course, we must also point out that currently this index is below its zone, so it actually starts this expiry already in bear territory, which won’t please many.

Furthermore, the terrible irony of it all, is that all that woe this index had in Sept trying to get past R2 at 7150 and then R3 at 7200 is now no longer a problem, with R1 above the zone not kicking in until 7250.

But, first things first, and that is a hold at R1, and then to recapture its new zone. Otherwise it’s a long way down to R2 support.

Finally, don’t forget that we are now back to an intermediary expiry, so everything gets taken down a notch, or at least it should, as overall activity is about a quarter of what we saw in September’s triple witching expiry.

 

Range:            6950  to  7000       

Activity:          Very good

Type:              On balance bearish

 

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September 13th, 2021 by Richard

Can the FTSE hold in its zone for the rollover and expiry?

 

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       

Activity:          Poor

Type:              Bearish

 

 

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       

Activity:          Poor

Type:              Bearish

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September 6th, 2021 by Richard

As we pass the halfway point can the FTSE manage one last Hurrah?

 

Nb. Our comment from the 08/31/21

Apologies for not posting last week, but as you can see by comparing the two tables above, not a great deal has changed.

Although, we do hold our hand up here and admit that it would very probably have been rather useful to know that the Y2 ratio bandwidth above the zone went from 7050 up to 7150.

Basically, the last three day’s intraday highs of 7151.75, 7150.12 and 7157.60 respectively just about tells you all you need to know.

Although the close on Friday was just below R2, please don’t forget that that was strike 3 (so it is already on borrowed time) and that this is a triple, where it generally takes on the high R ratios, or at least it’s those that are needed to turn the tide.

Which brings us around to one of the changes, being the appearance of R3 at 7200.

So, will the FTSE stay in its Y ratio bandwidth? If not, will R3 then hold?

Of course, we don’t know but, at least now you know where the dynamic delta is so you can tighten stops or at least have your finger poised over the button.

What we will say though, is that DR at 7250 is far closer to B1 than it is to R3, and the differential is something akin to R2 in its own right, so therefore a very significant hurdle, which is probably of more use to the portfolio investor.

Also, there are now just three weeks to go in this expiry and any further forward progress is always going to be tainted by the fact that the zone is static down there at 7000, so it will always look temporary to us for now.

 

Range:            7050  to  7150        or        7150  to  7200       

Activity:          Moderate

Type:              On balance bullish

 

  

Nb. Our comment on 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       

Activity:          Poor

Type:              Bearish

 

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The faction account of the Big Bang, The Great Storm and the market crash of 1987, available in eBook and paperback here, a must read if you don’t believe in history repeating itself.

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August 31st, 2021 by Richard

Now we are starting to look like a triple witcher in the FTSE.

Nb. Our comment from the 08/20/21 (Not published)

Nb. Our comment on 08/31/21

 

Apologies for not posting last week, but as you can see by comparing the two tables above, not a great deal has changed.

Although, we do hold our hand up here and admit that it would very probably have been rather useful to know that the Y2 ratio bandwidth above the zone went from 7050 up to 7150.

Basically, the last three day’s intraday highs of 7151.75, 7150.12 and 7157.60 respectively just about tells you all you need to know.

Although the close on Friday was just below R2, please don’t forget that that was strike 3 (so it is already on borrowed time) and that this is a triple, where it generally takes on the high R ratios, or at least it’s those that are needed to turn the tide.

Which brings us around to one of the changes, being the appearance of R3 at 7200.

So, will the FTSE stay in its Y ratio bandwidth? If not, will R3 then hold?

Of course, we don’t know but, at least now you know where the dynamic delta is so you can tighten stops or at least have your finger poised over the button.

What we will say though, is that DR at 7250 is far closer to B1 than it is to R3, and the differential is something akin to R2 in its own right, so therefore a very significant hurdle, which is probably of more use to the portfolio investor.

Also, there are now just three weeks to go in this expiry and any further forward progress is always going to be tainted by the fact that the zone is static down there at 7000, so it will always look temporary to us for now.

 

Range:            7050  to  7150        or        7150  to  7200       

Activity:          Moderate

Type:              On balance bullish

 

Available to buy now

The faction account of the Big Bang, The Great Storm and the market crash of 1987, available in eBook and paperback here, a must read if you don’t believe in history repeating itself.

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August 16th, 2021 by Richard

With the rollover and expiry looming 7250 is key for the FTSE

 

Nb. Our comment from the 08/09/21

Generally, we have the last ratio table on the right above as a term of reference, so everyone can see at a glance how the ratios have changed, and therefore what the trend is.

However today, it is also very useful in helping to explain the price action in the FTSE last week.

Essentially, Monday and Tuesday were governed by the right-hand column, whereas the rest of the week by the left hand one.

In a nutshell, the first two days were all about 7100, whereas the rest of the week was all about 7150.

Very interesting, and also significant, is that after Wednesday’s intraday high of 7142.54, the market never went back to even being near R2 again.

It is a real shame as almost every other market is setting new all-time-highs virtually weekly, yet here it keeps on getting walloped by the R ratios.

Made all the harder to bear having just managed to break free of its zone.

Although there are still two-weeks to go in this expiry, which is already feeling as if it has been going on for ages, the way ahead is beginning to look very difficult.

After 7150 the exponential ratio levels just keep going up and up every 50-points, so it may just crest one hill to find another mountain just in front.

On top of all this, if it fails at 7150, then the commensurate support ratio level is not until 6950.

As the market is at 7122.95, in our view, there is only 27.05-points upside, against 200-points downside, notwithstanding the fact the zones upper boundary appears first. Or, of course, the ratios could change in the meantime.

 

Range:            7050  to  7150       

Activity:          Moderate

Type:              Bearish

 

 

Nb. Our comment on 08/16/21

 

We have to hold our hand up here, as we never really expected the market to get past what was then R2 at 7150, let alone R3 at 7200.

But it has, despite the fact those levels at some point last week dropped to R1 and R2 respectively.

So, rather than a 27-point upside, it has managed to carve out a 100-point one, which means it most definitely has grown a pair to achieve these new all-time-highs, and joining all the other indices in doing so.

Which is actually a rather sad reflection on the FTSE in all truth, as although it has achieved this distinction, we don’t think there can be any argument at all, that it has found it particularly hard going, unlike, say, the SPX for instance.

Anyway, it all starts to get very serious this week as it is the rollover and expiry.

More significantly, the FTSE is now facing DR at 7250, which will be an almighty dynamic delta test for an index that can hardly cope with being stuck in the middle of a R2 ratio bandwidth for the last three days.

Obviously in light of our comments above, one can never say never, but yeah, it would be an unprecedented achievement in an intermediary expiry.

Even more so with the rollover looming.

Do not lose sight of the fact the zone is down at 7000, and the nearest Y ratio doesn’t start until it gets below 7150.

Out of interest the triple witching September expiry, has DR ratio at 7250 as well.

Hat’s off to the FTSE for doing what it has done, but unless there is a seismic shift in the ratios over the next day or so, then reality, or the number of futures being dumped on the market courtesy of the dynamic delta, will take its toil we believe.

 

Range:            7050  to  7250       

Activity:          Moderate

Type:              On balance only just bearish

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August 7th, 2021 by Richard

7150 is still key for the FTSE

 

Nb. Our comment from the 08/02/21

The FTSE did try to break out from its zone on Thursday, so it was evidently still trying for that aspect of “freedom” we have been blethering on about for ages now.

As you can see from the table above R1 now resides at 7100, what we don’t know (and never will) is whether it was there on that Thursday when the intraday high was 7093.93. If it was then the Friday makes a lot more sense.

Which is all we can say about that day, as officially the open, high, low and close was 7078.42, 7078.42, 6996.93 and 7032.30 respectively.

In the real world the open was circa 7021, and the high was 7056 and earlier in the day 7046, both being rallies of about 50-points and both being strikes of the FTSE zones upper boundary.

The close is always derived, courtesy of the auction, meaning the only “true” figure is that of the low. This all makes a mockery of chartists, point & figure, candlesticks or many other technical indicators, sadly.

Anyway, at the end of the day, the FTSE is back inside its zone, all safe and sound, and nice and cosy.

And, in a word, boring. As evidenced by the fact that it took all week to gain all of 5 whole points. Although it certainly seemed far more exciting at the time.

There is no doubt in our mind that the FTSE is definitely getting very frustrated by being zone-bound, but from what we are seeing it also doesn’t display anything close to the aggression needed to combat the ratio levels.

Speaking of which, should the market grow a pair, 7150 is still a massive ratio level.

In the meantime, it will just have to wait for more conducive ratio alignments, as if it did get something like those we are seeing in the SPX, then it really will be summertime.

 

Range:            6950  to  7050       

Activity:          Moderate

Type:              On balance only just bullish

 

 

Nb. Our comment on 08/09/21

 

Generally, we have the last ratio table on the right above as a term of reference, so everyone can see at a glance how the ratios have changed, and therefore what the trend is.

However today, it is also very useful in helping to explain the price action in the FTSE last week.

Essentially, Monday and Tuesday were governed by the right-hand column, whereas the rest of the week by the left hand one.

In a nutshell, the first two days were all about 7100, whereas the rest of the week was all about 7150.

Very interesting, and also significant, is that after Wednesday’s intraday high of 7142.54, the market never went back to even being near R2 again.

It is a real shame as almost every other market is setting new all-time-highs virtually weekly, yet here it keeps on getting walloped by the R ratios.

Made all the harder to bear having just managed to break free of its zone.

Although there are still two-weeks to go in this expiry, which is already feeling as if it has been going on for ages, the way ahead is beginning to look very difficult.

After 7150 the exponential ratio levels just keep going up and up every 50-points, so it may just crest one hill to find another mountain just in front.

On top of all this, if it fails at 7150, then the commensurate support ratio level is not until 6950.

As the market is at 7122.95, in our view, there is only 27.05-points upside, against 200-points downside, notwithstanding the fact the zones upper boundary appears first. Or, of course, the ratios could change in the meantime.

 

Range:            7050  to  7150       

Activity:          Moderate

Type:              Bearish

 

Available to buy now

The faction account of the Big Bang, The Great Storm and the market crash of 1987, available in eBook and paperback here, a must read if you don’t believe in history repeating itself.

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August 2nd, 2021 by Richard

The FTSE needs to grow a pair if it to break free of its zone.

 

Nb. Our comment from the 07/26/21

The FTSE certainly got its “freedom” but perhaps not in the way many expected.

Ourselves included, as we reckoned on a drop down to test R1, then at 6950, was most likely, followed by a bounce just like the July expiry.

Sadly, we didn’t anticipate a very bad opening last Monday, which by our reckoning was circa 6944 (the official 7008.09 is rubbish) which meant it was below our level before the dynamic delta even had a chance to kick in.

Bit like going limit-down in commodities.

Furthermore, holding our hand up, the incursion past R2, then at 6850, was far deeper than we would have liked, but in our defence, we are unsure when it changed.

By which we mean, and as you can see in the table above, that today R2 is at 6800, but when we checked at the end of last week, it was actually at 6750.

And the significant changes in the ratio table above can only be caused by a significant amount of activity.

Of course, it doesn’t take much to change the Y ratios, as that is what they are designed for, but shifting R2 around like a chess piece, takes quite a lot.

And, whilst on the subject of R2, please note that above the now changed zone it is at 7150, albeit only just.

Also, worth noting, is that every 50-points after this the exponential ratios climb steeply.

Final point of note, is that last Thursday the intraday low was 6956.24, which was either R1 or R1 and the bottom boundary of the zone, depending on when it changed.

Whichever it was, as it stands now, the market is back inside its zone, and it knows what is beneath it now, so all that remains is to find out how aggressive it might be should it test the upper boundary. And, please do keep an eye out on where the SPX is in relation to its ratios.

 

Range:            6950  to  7050       

Activity:          Very good

Type:              On balance bearish

 

Nb. Our comment on 08/02/21

 

The FTSE did try to break out from its zone on Thursday, so it was evidently still trying for that aspect of “freedom” we have been blethering on about for ages now.

As you can see from the table above R1 now resides at 7100, what we don’t know (and never will) is whether it was there on that Thursday when the intraday high was 7093.93. If it was then the Friday makes a lot more sense.

Which is all we can say about that day, as officially the open, high, low and close was 7078.42, 7078.42, 6996.93 and 7032.30 respectively.

In the real world the open was circa 7021, and the high was 7056 and earlier in the day 7046, both being rallies of about 50-points and both being strikes of the FTSE zones upper boundary.

The close is always derived, courtesy of the auction, meaning the only “true” figure is that of the low. This all makes a mockery of chartists, point & figure, candlesticks or many other technical indicators, sadly.

Anyway, at the end of the day, the FTSE is back inside its zone, all safe and sound, and nice and cosy.

And, in a word, boring. As evidenced by the fact that it took all week to gain all of 5 whole points. Although it certainly seemed far more exciting at the time.

There is no doubt in our mind that the FTSE is definitely getting very frustrated by being zone-bound, but from what we are seeing it also doesn’t display anything close to the aggression needed to combat the ratio levels.

Speaking of which, should the market grow a pair, 7150 is still a massive ratio level.

In the meantime, it will just have to wait for more conducive ratio alignments, as if it did get something like those we are seeing in the SPX, then it really will be summertime.

 

Range:            6950  to  7050       

Activity:          Moderate

Type:              On balance only just bullish

 

Available to buy now

The faction account of the Big Bang, The Great Storm and the market crash of 1987, available in eBook and paperback here, a must read if you don’t believe in history repeating itself.

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July 19th, 2021 by Richard

First look at Aug as freedom beckons for the FTSE.

 

Nb. Our comment from the 07/12/21 (Not published)

Nb. Our comment on 07/12/21

 

We did get our perfect expiry in July, in ratio terms that is, so we are very pleased naturally. And, we were more than happy with the index staying inside its zone all day on the rollover (Wednesday), but just to add that bit of extra icing on the cake, the market spiked up on the actual expiry to make the EDSP 7058.71, which was just in the zone as well. Happy days.

However, derivatives are a forward-looking game, so getting straight into the August expiry and you can see the zone is the same.

And, if you cast your mind back to the start of the July expiry, the market went down to test R1 at 6950 with the intraday low of 6948.63 on the 21st June before recovering to end the day in its zone.

We are not saying that this is going to happen, but that is exactly where R1 is at the start of the August expiry, and in another twist of fate, the market opened that day at 7017.47, where the open today will be 7008.09. Hmmmmm.

The good news, for the bulls at least, is that above the zone R1 does not kick in until 7250, and then it’s not R1 but R2.

This is a huge jump up in the dynamic delta from the Y ratios, so that will be like running into a brick wall should the market get there.

Should be a lot more fun this expiry, as there was no doubt about it that the FTSE was getting extremely frustrated being corralled within its zone for pretty much the entire four weeks of the last expiry.

So, if it only continues on with the level of sensitivity it had in the July expiry, then we have a potential trading range over the 5-weeks in the August expiry of 6950 all the way up to 7250, a probably very welcome 300-points. Enjoy.

 

Range:            6950  to  7050       

Activity:          Very good

Type:              Neutral

 

 

Available to buy now

The faction account of the Big Bang, The Great Storm and the market crash of 1987, available in eBook and paperback here, a must read if you don’t believe in history repeating itself.

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