As we said at the end of last week “yesterday we said the FTSE seemed happy to be in neutral” by which we meant the NZ, or Neutral Zone or just plain zone, and it evidently was.
Closing down for the long weekend you literally can’t get more neutral than the middle of its zone.
Obviously it will have a little bit of catch-up today but it has plenty of scope (either way) and as there are no changes in the ratios today it is still the case that there is less ratio above the zone than below it.
One aspect we have to mention though is the close on Friday turned a positive real time close of +4.58 into the loss courtesy of the auction losing a whopping 10.18 points.
Range: 7350 to 7450
The DAX must have read what we said as yesterday they gapped down 62 points at the open to 12105, but more importantly this was outside their NZ.
Interestingly yesterday Y2 was at 12100 and not only was that where the market opened but the low was 12064, not very far below it.
Conversely the high was 12173 but this does not do justice to how long this index traded around 12150, or the bottom boundary, but still failed to break back into it.
Now it has achieved its breakout we are sure it doesn’t want to go straight back but it is certainly not acting very bearish so it just may not have a choice.
Range: 11950 to 12150 or 12150 to 12250
Activity: Very poor