Nb. Our comment from the 03/22/21
Well, what can you say about the March expiry just ended, apart from applaud the incredibly persistent bulls yet again?
Made all the more impressive as they came under tremendous pressure at the very start, with this index testing the bottom boundary of its zone (6450), with the intraday low of 6465.57 back on the 26th Feb.
However, for all their endeavour, from last expiry to this, the net gain was just 96.36-points, which is hardly earthshattering really.
Although, we can really appreciate why, as everybody knows about the recent all-time highs Stateside, and in the DAX, but the CAC was only 20 odd points away from theirs recently, so the FTSE still being 400-points shy, a mere 5.6%, looks a real anomaly.
Which is also what the market data from Friday is, courtesy of this aberration of the opening price.
In reality, the FTSE opened down a chunk at around 6714, and the intraday high was 6756.50.
And for those of you who like a candlestick, if the open was circa 6714, and the close 6708 (in real time it was actually 6720.39 btw), then that’s a Doji in our book.
Anyway, after the madness of the “biggie” everything should calm down considerably for a plain ole intermediary expiry.
Although we don’t see it as any less exciting, and the ratio levels are in the table above (please note Friday’s real intraday high here as well), so the only aspect we can add, is that it appears very likely the zone will move up to 6650-6750.
Range: 6650 to 6750
Activity: Very good
Type: On balance just bearish
Nb. Our comment on 03/29/21
The first week of the April expiry was all about the zone’s upper boundary, 6650.
Monday 22nd saw strike 1, with the intraday low of 6650.96.
Tuesday was a rest day, but battle recommenced on the Wednesday, with the intraday low of 6649.37.
But what made these tests so remarkable, was that they occurred very first thing, right after the opening bell, and the market tumbled a very significant number of points, hit the boundary, then bounced straight back up, in both instances.
This made Thursday a bit of a defining moment, as when the market hit 6650 for strike 3, it only held it up for about 10 to 15 minutes, which is exactly what we would expect, and thereafter traded mainly 15-points below it.
A decent Wall St. came to the rescue, the SPX managing to dig itself out from below its own zone and therefore back into bullish territory.
Therefore, we suspect the second week of the April expiry, will be all about 6750.
And, for those watching closely, the closing auction actually traded up to 6747.3, but it didn’t manage to hold it.
Interestingly, the French would actually count this as the intraday high.
But we all know how weird and inaccurate the FTSE’s O, H, L, C really is by now.
So, 6750 is going to be the first test for the bulls, which means it will be very illuminating to see how they react, as after all, it is just R1.
Furthermore, we are still expecting the zone to actually shift to 6650-6750, which may add a bit more weight to the R1 ratio already there.
The other aspect to note, is that the next two levels, 6850 and 6950, both skip a ratio level, which, if the market even gets there, will be a very nasty surprise indeed.
Finally, worth noting how strong the ratios are below the zone, which is nice to see.
Range: 6650 to 6750
Type: On balance only just bearish