Nb. Our comment on 07/29/19
It has been a long time since our last comment, 14 trading days to be precise.
The point being, that even with virtually 3-weeks gone, and an expiry in between, not a lot has changed.
Basically, back on the 8th July, in the July expiry, the market closed at 7549.27, which was right at the top end of our Y2 ratio bandwidth, which went from 7450 to 7550.
The FTSE then spent the next two weeks having a running battle with the R2 ratio that kicked in at 7550.
On the 22nd July we saw the start of the August expiry, and guess what.
In this expiry, the Y2 ratio bandwidth stretches from 7500 to 7550, which is where R2 resides again.
And, the coincidence doesn’t end there, as the market closed at 7549.06, essentially the same as three weeks ago.
Coincidence or not, but for us R2 has been the constant factor throughout.
Of course, last week was all about 7550 as well, or again the FTSE battling R2.
There is absolutely no doubt that this market wants to go better, it just has a lot of futures it has to absorb first, courtesy of the level of dynamic delta brought about by the R2 ratio.
The real aspect to be very aware of, is that the nearest R ratio going the other way is at 7350.
There is the zone in between of course, which will provide support, but with three weeks left on this expiry there is still ample opportunity for this market to experience a scare at some point.
Range: 7450 to 7550 or 7550 to 7600