Nb. Our comment from the 09/28/20
As we mentioned on the 23rd at the start of last week it was all about the support R2 was providing at 5800.
That very same day the market rallied, but significantly failed to hold above R1, which was at 5900, closing at 5899.26.
Extremely close, but no biscuit, and to make matters worse, it was by design, as in real time the market closed at 5906.48, and it was the auction that took it below.
The next day, Thursday 24th saw the intraday low of 5805.28, which was back to our old friend R2, and made it strike 3.
We did calculate the ratios on Friday, and R2 had moved up to where it is today, at 5850.
So, the big question, is whether the intraday low of 5771.49 is close enough to R3 at 5750 to be called a test, and for us, that is not quite, as we would prefer to see it within 10-points, or, at the end of a 2% move, when all the greeks spike.
Shame though, as with the intraday high of 5843.72, that would constitute a bandwidth test.
Obviously now, 5850 is the crucial level, with R1 at 5900 just above that.
But as this market has been playing near R3, then 5900 should hold no fear for it.
Of course, once, or if, it gets above these levels, then all it has in its way is the minimal Y2 ratio and its zone.
So, it has a tough 50 to 60-points ahead of it, but if it can achieve that, then there is nothing meaningful in its path all the way up to 6150.
Naturally, our first goal, would be to see the market back in its zone, so our target is 5950 to 6050, but being honest, we would love to see this index travel from R to R ratio and then end the expiry in its zone for the perfect expiry.
Range: 5750 to 5850
Activity: Moderate
Type: Bearish
Nb. Our comment on 10/06/20
There has hardly been any change in the FTSE’s ratios, which is a really good thing, as you can see them in action without having to spot a moving target.
In fact, last week, you only had to remember two levels really, so not a big ask.
But, had you dome so, your timing should have been impeccable.
On the very day of our last note, 28th Sept, we mentioned the levels, if you hadn’t seen them in the table, and it was the zones bottom boundary that was the pertinent one.
The market stormed ahead straight from the off, but it wasn’t until early afternoon that it encountered 5950.
It had two more pops at it, roughly 40mins between each, before it gave up, and finished at 5927.93, having achieved the intraday high of 5954.42.
Then it was back to our old friend R2 at 5850 for the next three days.
The intraday lows on the Tues, Wed and Thu were 5862.93, 5854.46 and 5849.82 respectively.
On Friday it went down to 5809.61, and we know R2 had slipped to 5800 on Monday, but whether it had last Fri who knows, but anyway, Fri was strike 4, so it was on borrowed time either way.
Of course, yesterday, we are now back to the bottom zone boundary, and despite the very early spike, the FTSE hit 5950 twice in the afternoon before capitulating.
Three times, if you include the real time close of 5948.80, before the auction wiped 6-points from it.
So, same as last week, if it can hold above 5950, then there is literally no ratio up to 6050, then just Y2 above that, and as we are only half way there is still time.
Range: 5800 to 5950
Activity: Moderate
Type: On balance only just bullish
