FTSE & DAX Ratio Table 29th August 2018
Our last comment on the FTSE was back on 22nd August so here is a quick reminder of what was said; “therefore 7550 is the all-important level now, as below it there is zero ratio until 7450, but at the other end if it can cope with 7600 (last 2 intraday highs 7616.15 & 7601.65) then it would reveal it is comfortable taking on Y2, which would then leave the way open to 7750”.
Essentially that was the story of last week in this index, as it satisfied itself bouncing around between 7550 and 7600.
London was closed on Monday so it seems it took the exuberant US to give the FTSE enough impetus to break through 7600 yesterday, despite it now being R1.
The fact the ratio has moved up doesn’t really change anything as 7750 is now R3, so in essence the differential is the same, its just the numbers are bigger, which is perfectly in keeping with a triple witching expiry.
At the end of the day the FTSE wasn’t comfortable in Y2 so it doesn’t look like that has improved any now it is in a R1 ratio bandwidth, despite the fact it is 200-points wide, giving it plenty of scope if it was.
Unless London grows a pair, it could easily find itself stuck again in a 50-point corridor as it struggles to cope with R1 ratio, and the activity reflects this problem, to us at least.
It is perhaps worth mentioning that although the type of activity is as below, were we to apply some discretion then we feel “not bullish” would perhaps be more appropriate.
Range: 7550 to 7750
Activity: Very poor
As we say above here is a little reminder of our last comment in the DAX;” well, in truth, the surprise was only for those who were unaware of how the ratios were aligned for this expiry….Our minor disappointment was we never saw a test of 11950, which has today changed from DR to R3, as that would have been really spectacular….However, it seems R2 at 12150 proved admirably up to the task, with the last three lows of last week coming in at 12120, 12168 and 12135 respectively”.
And if one casts one’s mind back to the rollover we suspect there were very few who had highlighted the possibility or potential for this index to bounce 400-points.
More importantly the ratios are still very lopsided as you can see, and if we do see from R2 to corresponding R2, then 12950 should now be entering on one’s radar.
First things first and it still has to get out of its zone first.
On Monday the intraday low was 12429 and the high 12562, which is a zone bandwidth test in anyone’s book.
So, the breakout should have been yesterday, and it did try, getting as high as 12597, but it is significant it closed back in its zone.
And not only that the real time close was +11.98, so it was the auction that wiped 22.87-points off this index sending it not only into negative territory but also to its low of the day.
Still 4-weeks to go, but there is no doubt that this index is still going to be far more exciting then London, which is also exactly what the rollover revealed.
Range: 12450 to 12550