Nb. Our comment from the 08/31/21
Apologies for not posting last week, but as you can see by comparing the two tables above, not a great deal has changed.
Although, we do hold our hand up here and admit that it would very probably have been rather useful to know that the Y2 ratio bandwidth above the zone went from 7050 up to 7150.
Basically, the last three day’s intraday highs of 7151.75, 7150.12 and 7157.60 respectively just about tells you all you need to know.
Although the close on Friday was just below R2, please don’t forget that that was strike 3 (so it is already on borrowed time) and that this is a triple, where it generally takes on the high R ratios, or at least it’s those that are needed to turn the tide.
Which brings us around to one of the changes, being the appearance of R3 at 7200.
So, will the FTSE stay in its Y ratio bandwidth? If not, will R3 then hold?
Of course, we don’t know but, at least now you know where the dynamic delta is so you can tighten stops or at least have your finger poised over the button.
What we will say though, is that DR at 7250 is far closer to B1 than it is to R3, and the differential is something akin to R2 in its own right, so therefore a very significant hurdle, which is probably of more use to the portfolio investor.
Also, there are now just three weeks to go in this expiry and any further forward progress is always going to be tainted by the fact that the zone is static down there at 7000, so it will always look temporary to us for now.
Range: 7050 to 7150 or 7150 to 7200
Activity: Moderate
Type: On balance bullish
Nb. Our comment on 09/06/21
Here we are at the halfway point of the September triple witching expiry and all we can say is that R2 at 7150 is having an amazingly robust and everlasting effect on this index.
Far more than we would ever have credited it with, and historically far more than it has before in one of the big expiries.
The only conclusion we can draw from this is that it is not the amount of dynamic delta that is producing R2’s longevity, but rather the lack of commitment by the practitioners.
However, what we have seen before, and especially in the third week, is that equities can take control, normally by means of an upbeat note on one (or two) of the heavyweight sectors like Financials, and the resultant jump in their collective share prices tend to get the market up and over this hurdle.
The trouble here is, that just over the R2 hurdle it faces R3 at 7200, and then DR at 7250, and all the while the expiry clock is ticking.
It really is a shame, as there is no doubting it, where all-time-highs are concerned the FTSE is an exceedingly poor relation to almost every other index, scrapping a new one out by less than 10-points, which is pathetic really by comparison.
And whilst mentioning highs, the intraday high on Tuesday 31st August was apparently 7160.49, which was up from the open of 7148.01, but all we saw was an easier open and the market barely troubling 7150 from beneath. The main reason we are saying this is so that there is a record of yet more false data.
Getting back to this week, if 7150 does break, then we could see a deep incursion into R3 as quite often the euphoria of the release is a bit like an elastic band breaking. If it doesn’t then the zone is the target, which is the case in both scenarios, it’s just a question of whether or not there will be one more last hurrah.
Range: 7050 to 7150 or 7150 to 7200
Activity: Poor
Type: Bearish
