Nb. Our comment on 06/26/23
Back to the usual format for the foreseeable, which also holds true for the actual expiry, now we are down to four weeks.
And last week was indeed all about the zone, just not the boundary we expected.
Although, there was plenty of warning what with the intraday low on Tuesday of 7566.33. Followed closely by 7520.92 on the Wednesday, which saw the market close at 7559.18, just above the bottom boundary at 7550.
It was certainly trying to stay in its zone but, most certainly, it wasn’t helped by what was happening in Europe and across the pond.
Anyway, once the boundary gave way on Thursday, it has managed to almost catch up on the drop seen in Europe.
Looking ahead and, at this point it may be worth considering the type of activity we mention below. As “on balance bullish” is quite bland, although it can all that is necessary normally.
However, this early on in an expiry, it can sometimes be worth pointing out that this description has been derived from the fact that there has definitely been a lot of bullish call activity but, the put activity was far more diverse, with ITM increasing but OTM decreasing. So, very much a mixed picture but, netted-off, definitely flattering the “bullish” activity calculation.
The overall result can be seen in the ratio table.
The obvious aspect is that R2 kicks-in at 7400, and how the FTSE deals with this number of futures buying generated by the dynamic delta will be a real test for the bears. Perhaps what isn’t so obvious is, that there is a small step-up in the level of R1 ratio at 7450, which may also generate an insight as to how committed the bears really are.
Range: 7400 to 7550
Type: On balance bullish
Nb. Our comment from 06/19/23
The zone in the FTSE June expiry did move down to 7450-7550, but it was very obvious this was on paper only.
The really important date here was the rollover Wednesday, the 14th, and anybody looking at the price action that day was left in no doubt that this index was in its zone.
The fact that it had many opportunities, like other European exchanges, to react to the rampant US markets, but didn’t, tells its own story.
Therefore, there is very little we can add to the June expiry except say we wish they were all this simple, or compliant.
Which brings us into the July expiry, and naturally the zone is still at 7550-7650.
Good news for the bulls though, is that the lower boundary is underpinned with R1, whereas the upper boundary has 200-points of Y ratio above it.
All things considered, it could be a good expiry for the bulls and give it a chance to catch up with the DAX. First though, it will have to break free from its zone, where it has resided for the best part of two weeks.
Range: 7550 to 7650