Nb. Our comment on 05/15/23
This has definitely been one of those expiries when it has all been down to the market and how it has/will interact with the ratio levels as, on the whole, they have remained static throughout.
For example, below the zone, this time there is only a minor change to R2 and the only other change this expiry was to R1 back on the 10th. Above the zone there have been a few more changes, but all mainly confined to R3, which hasn’t had much impact in truth.
So, as we have been saying, it has all been about how the FTSE has been interacting with the ratio levels at each boundary of its zone.
Very neatly encapsulated by Friday’s action centred around 7750, with the close actually managing to get the index back inside its zone for the weekend.
All they have to do now is hold it in its zone for either the rollover, the preferred choice, or the actual expiry.
Which, when you consider the last two expiries where we were one of the few, if not the only ones, to warn of the dangers in the March expiry (fell 543.53) and then call the bounce in the April expiry (up 478.82), it’s not surprising it wanted a rest before the second triple witching expiry of the year, June, kicks in.
And we did say we would try to give you the “head’s-up” for June so just to let you know this is how things stand at the present.
Don’t forget it is still very early days for the June expiry but the zone here is at the same level as the May expiry, which could make for a very easy and peaceful transition. However, the real meaty ratios don’t kick-in until 7450 below the zone and 8050 above it, although they do get a bit chunky at 7950, so plenty of room for a lot of excitement as well.
Range: 7750 to 7850
Nb. Our comment from 05/10/23
All these Bank Holidays are creating mayhem to our normal schedule of publication, so apologies for that.
Tuesday 2nd May may seem like an age ago that we last commented but it has only been five UK trading days.
As you can see in our previous comment, we didn’t really understand why they tried so hard in the last hour of trading to get the FTSE back above its zone but, in hindsight, it was almost definitely just for valuation purposes over the long weekend that was also a month end, especially when one considers what happened last week.
And rather than be all about the upper boundary of the zone, last week was all about the bottom boundary, 7750.
The market did close below the zone on Wednesday (rate decision day) but quickly regained it on Thursday.
Meaning four out of the five last trading days have been in its zone.
For those that have been following how the dynamic delta affects the benchmark indices, this pattern for the FTSE should not be new.
First week about the resistance above the zone. Second week all about the upper boundary, while the third all about the lower.
And before you know it, hey presto, we are into the rollover and expiry week.
So, things should at least get a bit more agitated as we approach this but, please bear in mind, that not only has time value has been disappearing rapidly but the second triple of the year has been sneaking up on us, the June expiry.
Hopefully, we will be able to give you the head’s-up next week as to how June is shaping up, but in the meantime just concentrate very closely whenever this index approaches one of its zone’s boundaries.
Range: 7750 to 7850
Type: On balance only just bullish