So far all according to plan for the FTSE, now it just has to nail the finish.
Nb. Our comment from the 11/05/19
We have said it before that the ratios need to be calculated daily, and as they are not, you must be very aware that they do evolve.
Thankfully, in the FTSE case, this has not been very much.
Last Monday, the 28th October, the intraday high was 7346.92, making this the second test of R1 at 7350.
This basically dictated the rest of the week, along with the upper boundary of the zone at 7300.
Therefore, it was no surprise yesterday’s third test saw it break through, and the fact the ratios have weakened above the zone only going to make this more likely.
7350 is still R1 admittedly, but it is now only just above the threshold, so we would fully expect that to become Y2 shortly, leaving 7400 as R1.
However, the real test will be 7450, as this has remained as R3, so this is now towering above R1.
And judging by how difficult this index has found R1, we just can’t see it making any headway at all against the hugely bigger R3.
Finally, don’t forget next week is the rollover, so it could start getting quite animated towards the end of the week, and below the zone the ratio has hardly strengthened, so it’s still sitting atop a chasm this market.
Range: 7350 to 7450
Nb. Our comment on 11/11/19
Last Monday the FTSE closed at 7369, and on Friday, 7359, so what an exciting week that was.
Although, for us at least, it was all according to expectation, and as you can see above, our trading range was indeed 7350 up to 7450.
7350 came into play three times, with intraday lows on the 5th, 6th and 8th of 7369.61, 7363.55 and 7349.12 respectively.
7450 came into play only the once, and you’ve guessed it, on the 7th, with the intraday high of 7431.94.
Sure it’s 18-points shy of the exact figure, but from the intraday low the day before of 7363.55, the fact it is a seven thousand point index, and as we expressly pointed out in our last comment, that 7450 was a huge jump in ratio, to the massive R3, then this is easily close enough to call a hit.
Of course, it is the rollover and expiry this week, so the zone, still steady at 7200 to 7300, will now come into play.
But probably more importantly, 7350 has now changed to Y2.
This has resulted in 7400 assuming the R1 role, otherwise the ratios are unchanged above the zone.
The most significant consequence of this is the change in our trading range, please see below.
It still has its work cut out for it, to get back to their zone, but this has just made this an awful lot easier.