Beware crooked FTSE data, otherwise all as normal.
Nb. Our comment from the 11/18/19
However, for the last two weeks London has been exhibiting some strange characteristics, although not never seen before, they are normally very rare and occur singly, not daily.
What we are referring to is the situation where the open is also the same as either that day’s high or low.
This is made all the more peculiar when one appreciates that in London, and only London, the open is the same as the previous day’s close.
So, on Monday the 4th the open was 7302.42 and that day’s intraday low was 7302.42.
Tuesday it was 7369.69 and 7369.61.
Just a normal day on that Wed, then 7396.65 and 7396.00 and on Fri 7406.41 with the high 7406.83.
Then similar for the first four days of last week.
The significance of this is that the next day’s open is never going to be exactly the same as the previous day’s close, the reason why only London chooses to adopt this is a mystery.
When the open is the same as either the high or the low means that the market only went in one direction, and that therefore the opening price was never a real one.
Therefore, when you see a differential of 0.08, see Tues 5th, and you know the open is fictional, then this differential is impossible.
Therefore, the only conclusion possible, is that two of that day’s benchmark index markers are false.
If this is the case, and how can’t it be, then this pulls into question every valuation or calculation that uses them, especially trading systems, HFT’s and technical analysis, to mention but a few.
Looking at the ratio table for Dec the big level is obviously going to be 7450.
The other main issues are that while the zone is way below the market now, it is odds on that it will move in the next day or so to either 7150-7250, or 7250-7350.
Obviously which one it moves to will change the overall picture considerably.
Range: 7100 to 7450
Activity: Very poor
Type: Bearish
Nb. Our comment on 11/26/19
The FTSE carried on for the first week of the Dec expiry exactly where it had ended the last, namely, with the same anomaly with either the high or low being the same as the open.
Of course, our view is that the opening price is the anomaly, and this just goes to prove how untrustworthy this data really is.
Especially when the difference is just -0.08 of a point, when everyone else knows the trading open was at the very least 10 full points above that.
Anyway, it has taken a week and a half, but eventually the FTSE has tested 7450.
Mighty impressive it was too, with at least three peaks, of about 20 minutes each, banging on that particular ratio door, but to no avail.
Of course, and as you can see by comparing the two tables above, 7450 has slipped from DR to R3, which is quite a big fall to be fair.
However, the market, is coming at it from Y2, and that is a far bigger difference.
The rest of this week is also weird, what with the American holidays, so R3 shouldn’t capitulate, but it’s always a difficult call in such thin markets.
We also fully expect to see the zone move to 7150-7250 before long, so really our trading range should be 7250 to 7450, which please bear in mind.
Whether it is 7450, or 7550, the market bullies its way to, at the end of the holidays, there is no doubting it that London is extremely top-heavy, with the best-case scenario for us, a target of 7200.
Quite often London participates in the “Thanksgiving Rally”, then pulls back, only to attempt our own “Christmas Rally”, so it will be a very interesting few weeks ahead, if it sticks to the plan of course.
