In the FTSE we mentioned “7700 is what we call a step-up, as it is just below the R3 ratio threshold, so may well provide an early insight into the level of conviction remaining”, and as the market got as high as 7691.34 that answered that.
However, it was the 7650 level that was far more important, and it took a very long time to break, holding out for about 3 and a half hours, and when it did go the market quickly hit 7624.14.
The fact they rallied twice just went to show the bulls are still trying, but the second attempt needed the auction to add 8.5-points to get the close back to the pertinent level, so all to play for again today.
Range: 7600 to 7650 or 7650 to 7750
The DAX just couldn’t be more compliant to the ratios at the moment.
First the NZ Bandwidth test, then the breakout and yesterday a drop of 172-points all the way down to R1 at 12750, getting as low as 12745, which considering the numbers involved is as close to a bulls-eye as you will get.
Now it knows where the book-ends are to this Y2 ratio bandwidth it will most probably trade within them, at least for a day or so.
Range: 12750 to 12950
Activity: Very poor