Nb. Our comment from the 04/26/21
Prophetic words (above) or what, as the very day we last published this market blew through 6950 and then went straight on to test the upper boundary of its zone at 6850, with the intraday low of 6857.07.
The intraday low the next day, Wednesday 21st April, is officially 6859.61, which is suspiciously close to the previous day’s close, and therefore Wednesday’s open, 6859.87.
We say suspicious, when what we really mean is wrong, which means that at the very least it is misleading, and at the worst purposefully done so for some nefarious reason.
This is because we had the open around 6875, and the intraday low, on two occasions, around 6865.
Therefore, we are not including that as strike two of our zone’s upper boundary.
However, the very next day, we have another conundrum, as the intraday high on the Thursday was 6941.11, so was it the first strike of R1 at 6950, or not?
On balance, we think not, as the market had already been above this level, so knows what’s there, so more likely than not, pulled up just short as nobody fancied being the one to force out the futures they know are lurking there.
What they don’t know, is that this level has gone up from R1 to R2, although it is only just above the threshold, it will still give it that bit more added dynamic delta.
Nevertheless, it will provide a very useful insight into how aggressive, or committed, the bulls are this trip.
On the flipside, this index is now in a 100-point Y ratio bandwidth, and it knows what’s at each end now, and if it acted rationally, we should see it move into its zone, so it looks like 6950 is still as critical as it was last week.
Range: 6850 to 6950
Type: On balance just bullish
Nb. Our comment on 05/04/21
Well, it seems that 6950 did indeed remain the critical level, as the FTSE never strayed very far from it all week.
Although, this was not for wont of trying, especially on the Thursday and Friday, when it had several very robust attempts at 7000.
Of course, last week, 7000 was R3.
This week, R3 has significantly dropped to 7050, and a couple of other moves may also have slipped under the radar, as both 6950 and 6850 have dropped down a level also.
So, the first week was all about 6850 to 6950, and as the second week was all about 6950, then this, the third week, may, could or even should, be all about 6950 to 7050.
It really now all depends on just how aggressive the bulls can continue to be.
Of course, the potential for shocks is all around, and specifically here, as if it ever gets tired of taking on the highest R ratios, then the corresponding ones below the zone are a scary 300+ points away.
However, at least on this side of the pond we have some ratios, as you will see in our note on the SPX tomorrow, their Y ratio bandwidth alone stretches for virtually 500-points, and that is truly scary.
But the bulls seem to be very much in control still, and as long as the ratios continue to fall away in front of these advancing markets, then we can’t buck the trend, but just point out that these advances are being made on incredibly thin ice.
And with three more weeks still to go this trip, then there in no real time constraint.
However, next up is the second triple of the year, so everything should go up a considerable notch then.
Range: 6950 to 7050