The FTSE acted all day as if 7500 was the epicentre of the NZ, trading the entire day within an 18-point range, rather eerily.
Of course, the actual one has yet to move but to all intents and purposes we don’t think there can be any doubt where its spiritual home is, which is easier to understand as it was so predictable.
Today we see the appearance of Y2 and whether or not it makes it by the expiry really doesn’t matter as we think by now everyone has got the picture, which is why our trading range is what it is.
Range: 7450 to 7550
A big shake up in the Jan expiry as well and although the zone here hasn’t moved it is looking rather likely to dovetail with Dec.
The ratios are very much weaker above the current zone and stronger below it which as one can see has switched the Y ratios around.
However, running this forward, we would not be at all surprised to see the NZ here ending up at 7450-7550, this could also mean the upper boundary will be R ratio with just Y on the lower one.
Range: 7450 to 7550
Activity: Very strong
DAX Dec to Jan Rollover 14th Dec 2017
It was a relatively quiet day for the DAX as well, for them just a 70-point range.
However, we did say we would expect the NZ to have an influence but all things considered being in Y1 on the rollover is not too bad, so a mild down day just about covers that.
The only ratio to change is R2 above the zone slips a bit and activity has tailed off as well.
Difficult to tell if this rollover was satisfactory or not, we think so, therefore it should enter this grey area with a license to go wild.
Range: 13050 to 13250
Activity: Very poor
Type: On balance fractionally not bearish
Not really as much activity in Jan as we would like to see at this stage, but it is a start and hopefully something to build on.
The only ratio to change is R2 below the zone, which is still a very long way away, and just to emphasise the point it is currently the last line of support as well.
No changes above the zone, but it too doesn’t fare much better, only getting as high as R3, but the big difference here is that these levels are not that far away from where the market is currently.
Range: 13050 to 13450
Type: On balance just bullish