FTSE and DAX today’s ratio levels and comment

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The “real” open to us was above the close in the FTSE so the subsequent retreat back to the bottom boundary was far more pronounced than the bare data suggests.

However it held very firm (low 7348.38) so no doubt who won that fight and the result is a lot of changes apart from the market itself which remains steadfastly zone bound.

Below the zone we see Y2 appear for the first time in two weeks and above the zone we lose Y1.

The fact that B1 drops to 6950 shows how weak the ratios are below the zone and is a result of bullish confidence but as the rollover starts next week and this index has been dormant for so long it is just perfectly primed to get aggressive.

Range:            7350  to  7450

Activity:          Moderate

Type:              On balance not bearish

The DAX evidently has loftier ambitions and the gap up at the open of 70 points took it to 12284 vaulting the upper boundary.

It did come back to the upper boundary, the low being 12265, to test it before taking off and at one stage got as high as 12363.

This made us think of our forecast back on the 21^st August at the start of this expiry “we very much doubt this expiry will be so sensitive but on the downside it goes straight from the Y ratios to R2 at 11950 so if it goes there this will prove to be a very significant level”.

Well we saw that low back on the 29^th August and the corresponding R2 now sits at 12650, which is now no longer quite as farfetched although time is rapidly running out, so it looks like a nail-biting finish is in store.

Range:            12150  to  12250      or       12250  to  12550

Activity:          Moderate

Type:              On balance bullish

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