FTSE Jne expiry not done any favours by May.

Nb. Our comment from 05/17/19 (Not published online)





Nb. Our comment on 05/22/19

The FTSE is a classic example of the expiry of one month (May) leaving another (June) in a difficult position.

For May, where the zone was 7350-7450 at the end, it was a tremendous achievement for this index to claw itself all the way back up from R1 at 7150 (intraday and expiry low 7150.89 13th May) to get to consecutive closes of 7353.51 and 7348.62 on the final two days. Well done.

The trouble, as is plain to see, that in June the zone was, and still is, 7150-7250.

And just to compound that, the ratio above it is already R3.

So, June has been born into a very high level of ratio.

No wonder it doesn’t know which way to turn.

Will it be necessary for this index to test DR at 7450, who knows?

As it stands, to us it doesn’t appear as if it has the bottle, as 7350 seems to be a tough hurdle, and this is only R3, which is what it’s in anyway.

It is not beyond the realms of possibility, but, as is also very plain to see, the ratios above the zone are far far greater than those below it.

Therefore, if it does, and 7550 is not impossible, as triples often go between the B ratios, or at least did a while back, we see this as only deferring the inevitable.

The real issue for us, in the five weeks that lie ahead in this expiry, is whether the bottom boundary of the zone will hold.

As, looking at it as it stands, the next ratio support level doesn’t kick in until 6950.

And, as this index is already ploughing through R3, then we doubt R2 will provide that much support.

The next few days should clear things up a great deal, but if we are to get a DR to DR expiry, and don’t forget May traded between the R ratios, you could be looking at a range of 600-points, which definitely deserves a wow wee.

Range:            7250  to  7450          

Activity:          Poor      

Type:              On balance definitely bearish

May 22nd, 2019 by