FTSE and DAX Rollover today’s Sept & Oct ratio levels and comment

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Any hope of a follow through in the FTSE from Monday’s huge performance on the Street was easily dismissed so in the end it was rather too easy to “difficult to dampen down the enthusiasm here”.

We do have mixed feelings about the FTSE this expiry although, as because the open is the same as the previous close, then we are pleased with the market being virtually dead center of its NZ on the rollover in line with our forecast.

The mixed part comes about because the market never ventured outside its NZ the entire expiry so it never went near our high and low, but again we have to be very pleased with the demonstration of the powerful influence exerted by said zone.

Range:            7350  to  7450

Activity:          Moderate

Type:               Bullish

It is far too early for any forecast for October however we have found it invaluable to monitor its development prior to becoming the next alpha expiry.

So far this has revealed that from the start there was no Y ratio whatsoever so if any does appear during the expiry that would be a strong indication of weakness potentially resulting in a zone shift.

Everything will depend where the market is on Monday but the main issue to address this expiry will be if London will grow a pair?

Range:          7350  to  7450

Activity:        Average

Type:             Bearish

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Exactly as we said yesterday in the DAX “now we are caught between a rock and a hard place as it could well test R2 today, which would complete our forecast of course but this would make getting back into their zone for Wednesday a very big task”.

In fact the time this index spent at 12550 (high 12558) is not done justice by the raw data.

As you can see from the table there have been a lot of changes, all above the zone, but no change in the NZ so to make the last leg of our forecast today will have to be a spectacularly bad day.

Conversely it could pre-empt a change in the zone, or even a mixture of the two, which is looking the more likely.

Range:            12250  to  12550

Activity:          Moderate

Type:               Bearish

October is still a work in progress so if there is to be a change in Sept it has time to adjust.

Furthermore with so little ratio in situ at the moment this is not going to be that difficult.

However we have seen a frontrunner emerge which is 12350-12450, and as we say above a “mixture of the two” would be the more likely and this is certainly in keeping with this.

Range:           12250  to  12800

Activity:         Strong

Type:              On balance bearish

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