It is a wonder to behold, that is, how desperately this index is trying to stay inside its zone for the rollover and expiry.
Also, just a little housekeeping, as when we said “…zone, which itself has also fallen, very significantly”, what we mean is that the drop in the zone is the significant aspect, not that the magnitude of the fall is significant.
Anyway, the day we published this index had one more test of R1 at 7150, intraday low 7130.52, but from that Thursday onwards it was all about the zone.
In the last couple of days, that has meant, trying to stay above the bottom boundary at 7200.
The trouble is, and a quick glance between the two tables above, will readily reveal how far the ratios below the zone have fallen.
And, in fact, we now have 100-points of the minimal Y1 ratio, where there was just 50-points of Y2, such has been the collapse.
Obviously, it will all be over for November in the next few hours, but had one known how significant 7200 was at this particular point in time, then you couldn’t have not been impressed by the effort to get/hold/stay above it, despite the support disappearing below it.
This happens to be but a very minor spot on this expiry, which has been a perfect example, what with the test of R1 above the zone at 7450, before the fall to the corresponding R1 below the zone at 7150, until ending up (as near as damn it) in their zone.
Nice one FTSE.
Why don’t you take the Ratio Challenge…select a chart of the FTSE from the open on 23rd September to the close on 18th October (the Nov expiry), highlight the zone, 7200-7300, and then put horizontal lines at R1, being 7450 and 7150, and look at that in 5 mins or even daily. Point made?
Range: 7100 to 7200 or 7200 to 7300
Type: On balance just bullish
Nb. Our comment on 10/25/19
If the last week of the November expiry was all about the zone, then this has transferred across to the October expiry in its first week.
On the very first day, Monday 21st, the intraday high was 7197.53, providing the first test of the zones bottom boundary at 7200.
The next day saw the market close at 7212.49, after what was a good tussle with it throughout the day.
Wednesday saw a retest of it, confirmation if you like, with the intraday low of 7194.13.
And Thursday saw it blast through the upper boundary, which is rather aggressive of the FTSE to say the least.
Therefore, it is prudent to mention how the ratios have evolved this week, and while we have seen a little strength below the zone, with R1 replacing Y2 at 7050, this still leaves a scary 150-points of Y1.
Above the zone, 7300 has moved up from Y1 to Y2, and 7350 from Y2 to R1, meaning 7400 has gone from R1 to R2.
At the start of an expiry there is a natural tendency to build, so it’s more about the degree, and there is no contest over the fact that resistance wins.
The big question is whether the intraday high yesterday of 7338.87 was a test of R1?
Only 0.15%, so it’s a tough call.
But, at the end of the day, it is all down to your tolerance, and as things stand the FTSE is now facing R1, R2 & R3 in quick succession, with nothing below it until 7050.
There are no prizes for guessing our stance, and at the very least, everyone else should have very tight stops.