Is that FTSE closing auction a sign?

FTSE Ratio changes now make 6600 critical.


Nb. Our comment from the 12/31/20


Such a shame really, as it was obvious the FTSE really wanted to go better, and that was before the Brexit announcement.

Monday and Tuesday last week saw this market drop into and then be contained by its zone, which was pretty much what we were hoping for in our last comment written before the week started.

However, the last two trading days of last week, saw the FTSE break out back above its zone.

Evidently in anticipation of a deal, which duly came and set the tone for the resumption of trading on Tuesday.

So, the immediate response was a very healthy jump, the trouble was, is that this jump propelled it right bang smack into the middle of our R ratios.

If you had seen our previous comment then at least you were forewarned, unlike the market, which was very obviously caught by surprise with the futures selling generated by R2 ratio dynamic delta from 6650 and above.

The fact that just one day later this index is now back to Y2 just goes to show how little it was prepared to take on those futures, or at least, so far.

It is now at a pivotal point, a decision moment if you prefer, as we still expect to see the zone here move to 6450-6550.

This means, should this happen, that 6550 is the critical level.

Below it, and it should be safely in its new zone, but, above it, and it has exponentially increasing R ratios every 50-points.

The only difference being, is that the market now knows what’s waiting for it up there.


Range:            6450  to  6600       

Activity:          Poor

Type:              On balance bullish



Nb. Our comment on 01/06/21


The closing auction yesterday was, or could turn out to be, a very significant point in this expiry.

But before we get into that we must mention Monday, as it was only the previous trading day that we commented that the only difference now was that this market now knew where R2 was hiding (please see above).

And, post Brexit agreement, it didn’t disappoint, and blasted out of the starting blocks, jumping just over 200-points.

The trouble was, this took it straight back to R2, with the intraday high of 6662.66.

Obviously, it hadn’t got used to the dynamic delta created by R2, but also, it was not really ready to capitulate either, which resulted in the FTSE trading just below 6650 for about the next 7 hours, until it eventually gave up in the final hour of trading.

Fast forward to yesterday’s closing auction, when the market managed to add about 13-points onto the real time close of 6599.60.

Now, the significance is that the ratios have changed, and 6600 is now the demarcation line between Y1 and the R ratios, so staying above it could prove crucial.

Below it is minimal ratio, and the zone (zero ratio), or to look at it another way, 250-points or almost 4%.

Dead ahead is R2, again, but this time it would be strike three, so if it goes there again, it should go “packing”, so there is a glimmer for the bulls, and after the effort of the auction, very possibly the desire.

But, and so typical of markets, any susceptibility to a scare, and if that forces it below 6600, then that’s an awful lot of emptiness waiting for it.

Great trading possibilities though…


Range:            6450  to  6600        or        6600  to  6650 (6700)       

Activity:          Good

Type:              Bearish


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January 6th, 2021 by