Nb. Our comment from the 08/02/21
The FTSE did try to break out from its zone on Thursday, so it was evidently still trying for that aspect of “freedom” we have been blethering on about for ages now.
As you can see from the table above R1 now resides at 7100, what we don’t know (and never will) is whether it was there on that Thursday when the intraday high was 7093.93. If it was then the Friday makes a lot more sense.
Which is all we can say about that day, as officially the open, high, low and close was 7078.42, 7078.42, 6996.93 and 7032.30 respectively.
In the real world the open was circa 7021, and the high was 7056 and earlier in the day 7046, both being rallies of about 50-points and both being strikes of the FTSE zones upper boundary.
The close is always derived, courtesy of the auction, meaning the only “true” figure is that of the low. This all makes a mockery of chartists, point & figure, candlesticks or many other technical indicators, sadly.
Anyway, at the end of the day, the FTSE is back inside its zone, all safe and sound, and nice and cosy.
And, in a word, boring. As evidenced by the fact that it took all week to gain all of 5 whole points. Although it certainly seemed far more exciting at the time.
There is no doubt in our mind that the FTSE is definitely getting very frustrated by being zone-bound, but from what we are seeing it also doesn’t display anything close to the aggression needed to combat the ratio levels.
Speaking of which, should the market grow a pair, 7150 is still a massive ratio level.
In the meantime, it will just have to wait for more conducive ratio alignments, as if it did get something like those we are seeing in the SPX, then it really will be summertime.
Range: 6950 to 7050
Type: On balance only just bullish
Nb. Our comment on 08/09/21
Generally, we have the last ratio table on the right above as a term of reference, so everyone can see at a glance how the ratios have changed, and therefore what the trend is.
However today, it is also very useful in helping to explain the price action in the FTSE last week.
Essentially, Monday and Tuesday were governed by the right-hand column, whereas the rest of the week by the left hand one.
In a nutshell, the first two days were all about 7100, whereas the rest of the week was all about 7150.
Very interesting, and also significant, is that after Wednesday’s intraday high of 7142.54, the market never went back to even being near R2 again.
It is a real shame as almost every other market is setting new all-time-highs virtually weekly, yet here it keeps on getting walloped by the R ratios.
Made all the harder to bear having just managed to break free of its zone.
Although there are still two-weeks to go in this expiry, which is already feeling as if it has been going on for ages, the way ahead is beginning to look very difficult.
After 7150 the exponential ratio levels just keep going up and up every 50-points, so it may just crest one hill to find another mountain just in front.
On top of all this, if it fails at 7150, then the commensurate support ratio level is not until 6950.
As the market is at 7122.95, in our view, there is only 27.05-points upside, against 200-points downside, notwithstanding the fact the zones upper boundary appears first. Or, of course, the ratios could change in the meantime.
Range: 7050 to 7150