Early bonus in the FTSE if you were paying attention.
Nb. Our comment from the 11/28/19
The FTSE carried on for the first week of the Dec expiry exactly where it had ended the last, namely, with the same anomaly as 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.
Range: 7100 to 7450
Activity: Very poor
Nb. Our comment on 12/06/19
Well we sincerely hope you all had your fingers poised over the red button when the intraday high on the 27th November was 7446.00 (DR/R3 @ 7450), as you would have received a rather early Christmas present.
And actually, 7450 has returned to DR, not that it was ever far off.
Of more interest however, is the rise to R1 at 7250.
The reason being that there was a potential move in the zone to 7150-7250, which added greater weight to the Y2 Ratio level it was.
The fact the market blasted past it on Tuesday this week told us that the zone hadn’t moved, although, with two weeks still to run on this expiry, it is not an impossibility yet.
Especially towards the end, when things get a lot friskier.
Obviously 7100 is now a critical level, although we wager there were not many of you back on 18th, or even the 28th of last month, that even considered our zone, standing at 7000-7100, being a possibility, let alone a target.
Obviously, 7000, irrespective of it being a round number, is our first support level, assuming it does indeed get inside its zone.
The fact it is the bottom boundary of the zone as well as being R3, should provide more than enough futures buying, or dynamic delta, to provide a very strong level of support.