January 24th, 2022 by Richard

The start of the Feb expiry gives the FTSE far more scope.

Nb. Our comment from the 01/17/22 (Not published)

Nb. Our comment on 01/24/22

 

We don’t think we can get away with not mentioning the end of the Jan expiry, especially as there was such a huge battle going on between derivatives and equities. And, we were anticipating a move up in the zone to 7350-7450 but, in the end, what we got was 7450-7550. So, the valiant R3 at 7550 that was such a thorn in the equities side in the final fortnight, did eventually capitulate, ending up as the upper boundary of the zone as well as R1. Meaning the EDSP of 7528.28 was actually in the new zone.

Furthermore, the huge levels of activity have continued on into the Feb expiry, so much so it has almost doubled the overall exposure that had been present, and in just one week. Which was rather fitting for an expiry that produced a 3.63% gain over the five-weeks of its length.

Therefore, it comes as no great surprise that the zone in Feb has ended up matching the Jan one, albeit one was at the end of its tenure while the other is just at the start of theirs.

How long will the market stay in its zone, who knows. But we hope it will be for this first week at least, if only just to let the dust settle.

If it doesn’t, then worth noting on the upside 7550 is now just Y2, so in reality, the fact it is the zones upper boundary will probably carry more weight than the level of dynamic delta produced by a Y ratio. The serious levels don’t start until 7650, and if it continues to be as aggressive as last week, then R3 doesn’t kick in until 7700.

On the downside, then what with the recent move up in the zone, it has left a huge amount of Y ratio below it, so the serious levels here don’t start until 7250. So, if you are a bull, then a week in its zone would be very beneficial as it might allow for the ratios down here to build up a bit.

Worth noting also Feb is the more regular four-week trip, and Jan also started their trip in their zone, although back then (20/12/2021) this was 7150-7250.

 

Range:            7450  to  7550       

Activity:          Outstanding

Type:              On balance only just bullish

 

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January 20th, 2022 by Richard

The market drags the SPX's zone back to its starting level.

 

Nb. Our comment from the 01/11/22

 

Looks like the door was Y2.

Which was slammed shut very unequivocally. So much so, being above 4800 seems a distant memory now.

What did surprise us however, was the fact that 4805 has held onto being Y2, although it did slip on the 6th to 4810 it recovered the very next day and has since quietly strengthened.

This is not that pertinent at the moment as the last five trading days have been all about the zone.

The -92.96-point fall on the 5th took this market right into the safety of the middle of its zone, 4700.58. The next day the market meandered 20-points either side of its zone, before eventually finishing back in it for the second day.

This made Friday quite the important day, as above the zone the bulls are in charge, whereas below it and it is the bears. In the end it closed below it, but not after an intraday high of 4707.95, giving that upper boundary one more test for good measure.

And with Monday also closing below the zone we would normally say that the decision has been made, making the first line of support the corresponding Y2 below the zone, currently standing at 4570.

Our only misgiving is that the intraday low on Monday was 4582.24, which considering was a fall of 94.79-points inflating the vega, is close enough under these conditions to count as a hit. So, basically, has it done it already?

Either way it is certainly going to make for an entertaining end to the Jan expiry we think, and it could just turn out to be a very original finale as well, as it has been a very long time since this index has been south of its zone when the sharp end of the expiry comes about.

For the record the Y1 ratio bandwidth has returned to the 235-points we were used to seeing for the first few weeks of this expiry.

 

Range:            4570  to  4695           

Activity:          Moderate

Type:              Neutral

 

Nb. Our comment for 01/20/22

 

Hopefully you saw it as soon as you looked at the above table, but the big news is that the zone has returned to its starting point of 4595-4605.

Hugely significant, and not just for the fact it has fallen, which is a bearish sign in the same way that a rising zone is bullish.

It was also the fact that the previous Monday, the 10th Jan, this market had tested Y2 at 4570 before staging a remarkable recovery. A recovery that took it back above the then zone of 4695-4705 for a couple of days. So, the bulls were evidently not spent yet.

However, dropping back below 4700 on the Thursday and Friday was the first indication that the bulls had run out of steam and that the bears were flexing their muscles. And, it was into this scenario that the zone dropped.

So, it looks like we are going to get that recent rarity, an expiry where the zone is actually above the current market level. In fact, so rare of late, they have probably forgotten what to do or how to act.

And, if there was still any doubt as to who is in charge, the market actually closed deep into the fallen Y2 level of 4545.

Worth noting is that when Y2 was still at 4570 the intraday low on Tuesday was 4568.70.

Don’t forget all these problems started when this index messed with Y2 at 4805 in the second week of this expiry, and doesn’t that seem like a very long ago now.

There is still a day to go, but essentially time has run out. So, we feel that this market would be doing very well in our estimation just to get the settlement price in the Y1 ratio bandwidth.

Although, there is a lot of finger-crossing that we might see this index finish in its zone, as that would give us the perfect expiry. Being from one ratio level, in this instance Y2, all the way back to the corresponding one on the other side of the zone before reversing once more to finish in said zone. If you do get these turning points right, it can turn a 5% trip over the length of an expiry into a 10% one, which annualised is “fair dinkum” as they say.

 

Range:            4445  to  4545        or        4545  to  4595           

Activity:          Moderate

Type:              On balance only just bearish

 

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January 17th, 2022 by Richard

With the rollover and expiry looming the FTSE's zone becomes more significant.

Nb. Our comment from the 01/10/22

As suspected R1 at 7400 didn’t last the night, leaving 7450 to take up that mantle.

And last week R2 was at 7500, and between these two levels they pretty much controlled what was happening in the FTSE.

The Tuesday and Wednesday showed just how desperate this market was to catch up with the rampant US markets, and on both days the market made deep incursions into R2 (above 7500) and even closed just north of it, but it was very plain to see that they really didn’t know how to cope with the persistent futures selling brought about by the R2 amount of dynamic delta.

Thursday was all about 7450, and the actual real world intraday high that day was 7498, not the aberration official 7516 caused by their weird policy. Whilst on this subject the real time close of the FTSE on Tuesday was actually 7497.42, it was the auction that took it to 7505.15, which is a cheat in our book.

Anyway, to more pressing matters, and this week the zone has moved up. Not expected, but also not surprising, and as there are still two weeks to go not that important last week anyway.

The real battle has been with R2, which is now gone, although we are sure 7500 will have legacy impact.

The important level is now 7550, which goes straight to R3 from R1, so will be all the more impactful for that. But, if this market couldn’t really cope with R2, and these levels are exponential, we just can’t see it handling this even greater number.

So, in our view, there is now very limited upside, and if the UK wants to follow the US and run for cover in its zone, then at least that has now moved closer. Nevertheless, the upper boundary is still 150-points south, so not insignificant.

This means 7450 and 7550 are the critical levels this week.

 

Range:            7450  to  7550       

Activity:          Good

Type:              On balance only just bullish

 

Nb. Our comment on 01/17/22

All we can say is that we hope you read last week’s comment (above), as if you did then literally everything that happened last week should have made sense.

The first two days were all about R1 at 7450, the market at that time being in the R1 ratio bandwidth of 7450 to 7550.

Had 7450 failed, then we would have been looking at a rather rapid retracement back to the zone.

But, it held, which meant that the market should then test the other end of this bandwidth, namely 7550.

The trouble here was that it wasn’t just the next level up in the exponential ratio scale, R2, but rather R3.

Which is a very significant increase in the number of futures selling bought about by the dynamic delta.

The fact that the market managed to eke out three new all-time-highs was very impressive under these conditions. The fact that two of them were by just a point or so was therefore all the more understandable.

And we must say it, but over the last three days of last week, on any chart timescale it was increasingly blatant that 7550 was a very serious level of resistance, such was the constant interaction with it and the repeated use of the closing auction to try to influence matters.

So, the bulls are going to be rather dismayed to learn that even after all that constant battering, R3 is still there.

And, to make matters worse, this week it is the rollover and expiry, so the zone is going to be ever more influential.

The good news is that it is looking likely that this will move up to 7350-7450.

But if you thought last week’s battle with R3 was intense, then this final week should just raise the stakes even more. What fun.

 

Range:            7450  to  7550       

Activity:          Very poor

Type:              On balance only just bearish

 

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January 11th, 2022 by Richard

If last week was all about the zone, this week the SPX's focus is on Y2

 

Nb. Our comment from the 01/05/22

 

A lot has happened since we last posted, both in the ratios and in the market.

Although a Santa rally, or what we like to call the year end performance bonus rally, was not the hardest call to make.

Way back on the 23rd December this market hit Y2, then at 4730 (please see above) with the intraday high of 4740.74 and a close at 4725.79.

This set the tone, as such a deep incursion into Y2 was quite the hint, and the very next trading day saw Y2 capitulate, and over the next few days we saw it slide from 4755 down to 4805.

The three intraday highs last week of 4807.02, 4804.06 and 4808.93 tell their own story, and so, when it came to yesterday’s 4818.62 it was already on strike 3.

Also, we would be very surprised if Y2 remains at 4805 much past today.

Talking of today, only now has the zone moved, standing at 4695-4705, meaning it has taken just over two-weeks to get back to where it was in the Dec expiry.

And, we very much doubt it is going to stop here either.

All in all, quite a few changes, but none of which that can take us away from the fact that this year looks like picking up from where most of last year ended.

Basically, knock, knock knocking on the retreating ratio door. The big question is which door, Y2 or R1?

In the meantime, the Y1 ratio bandwidth has gone from 235 to 285-points, while the overall Y ratio bandwidth has gone from 435 to 460-points.

This is not symptomatic of hugely committed bull market, but rather more like one stuck in automatic, while all the time there is the potential for a blink of the eye 10% correction.

 

Range:            4705  to  4805           

Activity:          Very poor

Type:              Neutral

 

 

Nb. Our comment for 01/11/22

 

Looks like the door was Y2.

Which was slammed shut very unequivocally. So much so, being above 4800 seems a distant memory now.

What did surprise us however, was the fact that 4805 has held onto being Y2, although it did slip on the 6th to 4810 it recovered the very next day and has since quietly strengthened.

This is not that pertinent at the moment as the last five trading days have been all about the zone.

The -92.96-point fall on the 5th took this market right into the safety of the middle of its zone, 4700.58. The next day the market meandered 20-points either side of its zone, before eventually finishing back in it for the second day.

This made Friday quite the important day, as above the zone the bulls are in charge, whereas below it and it is the bears. In the end it closed below it, but not after an intraday high of 4707.95, giving that upper boundary one more test for good measure.

And with Monday also closing below the zone we would normally say that the decision has been made, making the first line of support the corresponding Y2 below the zone, currently standing at 4570.

Our only misgiving is that the intraday low on Monday was 4582.24, which considering was a fall of 94.79-points inflating the vega, is close enough under these conditions to count as a hit. So, basically, has it done it already?

Either way it is certainly going to make for an entertaining end to the Jan expiry we think, and it could just turn out to be a very original finale as well, as it has been a very long time since this index has been south of its zone when the sharp end of the expiry comes about.

For the record the Y1 ratio bandwidth has returned to the 235-points we were used to seeing for the first few weeks of this expiry.

 

Range:            4570  to  4695           

Activity:          Moderate

Type:              Neutral

 

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January 10th, 2022 by Richard

Two critical levels for the FTSE this week, 7450 and 7550.

 

Nb. Our comment from the 01/04/22

Happy New Year to you all and may 2022 bring you all health, wealth and happiness.

Just to recap the first two days of this expiry were all about the zone, and 7250 did prove critical (please see above).

But thereafter it definitely got its Santa rally hat on and R1 was the next stop, then at 7350.

When we last published it had only just become R1 by a fingernail from the Y2 it had been on the 16th Dec, two trading days prior, so coming under assault from the rampant market we suspect it beat a very hasty retreat.

This means that by the end of last week we firmly believe R1 was at 7400, where it is today.

This then makes perfect sense of the price action last week, especially all the concentrated activity around 7403 on the Thursday and Friday.

Looking forward, as you can see in the above table, 7400 is still R1, but only just, and we wouldn’t expect it to remain so for much more than a day.

7450 is another matter entirely, and is in fact just a smidgen below the R2 threshold.

Which is actually the same situation for 7500, apart from this threshold being R3.

So, it is great it made a new all-time-high, and there is even scope for it to go back there again, but the dynamic delta futures selling brought about by R1 at 7450 and backed up by R2 at 7500 will certainly take the steam, and perhaps enthusiasm out of this market should it test these levels we believe.

On the other hand, and don’t forget we still have three weeks to go in this expiry, the zone is now 200-points south, with virtually no ratio in-between.

 

Range:            7250  to  7400       

Activity:          Moderate

Type:              Neutral

 

 

Nb. Our comment on 01/10/22

 

As suspected R1 at 7400 didn’t last the night, leaving 7450 to take up that mantle.

And last week R2 was at 7500, and between these two levels they pretty much controlled what was happening in the FTSE.

The Tuesday and Wednesday showed just how desperate this market was to catch up with the rampant US markets, and on both days the market made deep incursions into R2 (above 7500) and even closed just north of it, but it was very plain to see that they really didn’t know how to cope with the persistent futures selling brought about by the R2 amount of dynamic delta.

Thursday was all about 7450, and the actual real world intraday high that day was 7498, not the aberration official 7516 caused by their weird policy. Whilst on this subject the real time close of the FTSE on Tuesday was actually 7497.42, it was the auction that took it to 7505.15, which is a cheat in our book.

Anyway, to more pressing matters, and this week the zone has moved up. Not expected, but also not surprising, and as there are still two weeks to go not that important last week anyway.

The real battle has been with R2, which is now gone, although we are sure 7500 will have legacy impact.

The important level is now 7550, which goes straight to R3 from R1, so will be all the more impactful for that. But, if this market couldn’t really cope with R2, and these levels are exponential, we just can’t see it handling this even greater number.

So, in our view, there is now very limited upside, and if the UK wants to follow the US and run for cover in its zone, then at least that has now moved closer. Nevertheless, the upper boundary is still 150-points south, so not insignificant.

This means 7450 and 7550 are the critical levels this week.

 

Range:            7450  to  7550       

Activity:          Good

Type:              On balance only just bullish

 

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January 5th, 2022 by Richard

Zone up, retreating ratios...sound familiar in the SPX

 

Nb. Our comment from the 12/21/21

 

We have to start with the recently ended Dec expiry and, boy did they try hard to beat Y2 at 4705, with the ultimate failure resulting in an expiry nearer 4600 than 4700. However, this was still in the middle of the absolutely minimal Y1 ratio.

So, no problem, and just to add some icing on the cake the Jan expiry has its zone at 4600, so all in all a win: win situation.

That’s pretty much it for the good news though…unless you’re a vol trader that is.

The respective Y ratio bandwidths are actually slightly wider this expiry (Y1 = 235 & overall 435) but what is different is that they are almost evenly spaced out on either side of the zone.

This makes today very interesting for this expiry, as currently they are below their zone and therefore in bear territory.

To put this into perspective, yesterday in the FTSE it opened very weak, then went below its zone, but once it recovered from this dip it traded for the rest of the day right in the middle of its zone, around 7200 for those that don’t know.

So, for the SPX, the first target for today should be to regain its zone, then after that to hold onto it. Should it be particularly confident then it could even reclaim the bullish territory above its zone.

Considering what’s happening covid-wise at present, we think this is actually a very positive outcome considering. The question is whether it is just as a result of the market rebalancing itself post the Dec expiry (which gets our vote) or the bulls are back in town and have their sights still set on a Santa rally.

Of course, it could be a combination of these factors or something else entirely, but whatever it is then, you won’t get any ratio support until 4495 or resistance until 4730, so best plan accordingly.

 

Range:            4495  to  4595           

Activity:          Moderate

Type:              On balance decently bearish

 

 

 

Nb. Our comment for 01/05/2022

 

A lot has happened since we last posted, both in the ratios and in the market.

Although a Santa rally, or what we like to call the year end performance bonus rally, was not the hardest call to make.

Way back on the 23rd December this market hit Y2, then at 4730 (please see above) with the intraday high of 4740.74 and a close at 4725.79.

This set the tone, as such a deep incursion into Y2 was quite the hint, and the very next trading day saw Y2 capitulate, and over the next few days we saw it slide from 4755 down to 4805.

The three intraday highs last week of 4807.02, 4804.06 and 4808.93 tell their own story, and so, when it came to yesterday’s 4818.62 it was already on strike 3.

Also, we would be very surprised if Y2 remains at 4805 much past today.

Talking of today, only now has the zone moved, standing at 4695-4705, meaning it has taken just over two-weeks to get back to where it was in the Dec expiry.

And, we very much doubt it is going to stop here either.

All in all, quite a few changes, but none of which that can take us away from the fact that this year looks like picking up from where most of last year ended.

Basically, knock, knock knocking on the retreating ratio door. The big question is which door, Y2 or R1?

In the meantime, the Y1 ratio bandwidth has gone from 235 to 285-points, while the overall Y ratio bandwidth has gone from 435 to 460-points.

This is not symptomatic of hugely committed bull market, but rather more like one stuck in automatic, while all the time there is the potential for a blink of the eye 10% correction.

 

Range:            4705  to  4805           

Activity:          Very poor

Type:              Neutral

 

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January 4th, 2022 by Richard

Looks like the FTSE is heading straight away into tough ratio levels in 2022.

 

Nb. Our comment from the 12/20/21

In our last comment on the December expiry, we said “then holding this market between 7250 and 7350 should be the order of the week” and as the EDSP was 7264.53 we can only surmise that they did a good job.

However, quite often the settlement of one expiry can lead to problems for the next one, especially if the zones are not aligned.

And although this is the case here, the discrepancy isn’t so great and anyway there is a hundred points of the very minimal Y1 ratio above the January zone.

This should make for a very decent start to this expiry, as this 100-points of Y1 ratio together with a 100-points of the zone means that there is plenty of space for this index to play around in.

The one word of caution is that in just a few days, which you can see by comparing the two tables above, there has been a huge loss of Y ratio already. Although this may not continue, it is perhaps wise to be aware of the trend.

Also, January is a 5-week expiry and this, the first “extra” week can therefore sometimes be very quiet, although with everything that’s going on at the moment, we can’t see it getting away with this in the current climate.

Otherwise, looking at the above table, it is obvious there is far more ratio above the zone than below it, although this bias has been undone by the recent activity to a large extent, it is still significant and may yet come into effect as this expiry progresses.

In the meantime, obviously 7250 is the first critical level to watch out for, thereafter the next ones are in the table above for you.

 

Range:            7250  to  7350       

Activity:          Strong

Type:              On balance bearish

 

 

 

Nb. Our comment on 01/04/22

 

Happy New Year to you all and may 2022 bring you all health, wealth and happiness.

Just to recap the first two days of this expiry were all about the zone, and 7250 did prove critical (please see above).

But thereafter it definitely got its Santa rally hat on and R1 was the next stop, then at 7350.

When we last published it had only just become R1 by a fingernail from the Y2 it had been on the 16th Dec, two trading days prior, so coming under assault from the rampant market we suspect it beat a very hasty retreat.

This means that by the end of last week we firmly believe R1 was at 7400, where it is today.

This then makes perfect sense of the price action last week, especially all the concentrated activity around 7403 on the Thursday and Friday.

Looking forward, as you can see in the above table, 7400 is still R1, but only just, and we wouldn’t expect it to remain so for much more than a day.

7450 is another matter entirely, and is in fact just a smidgen below the R2 threshold.

Which is actually the same situation for 7500, apart from this threshold being R3.

So, it is great it made a new all-time-high, and there is even scope for it to go back there again, but the dynamic delta futures selling brought about by R1 at 7450 and backed up by R2 at 7500 will certainly take the steam, and perhaps enthusiasm out of this market should it test these levels we believe.

On the other hand, and don’t forget we still have three weeks to go in this expiry, the zone is now 200-points south, with virtually no ratio in-between.

 

Range:            7250  to  7400       

Activity:          Moderate

Type:              Neutral

 

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December 21st, 2021 by Richard

Covid vs the Santa rally as the SPX starts the Jan expiry.

 

Nb. Our comment from the 12/15/21 (Not published)

 

Nb. Our comment for 12/21/21

 

We have to start with the recently ended Dec expiry and, boy did they try hard to beat Y2 at 4705, with the ultimate failure resulting in an expiry nearer 4600 than 4700. However, this was still in the middle of the absolutely minimal Y1 ratio.

So, no problem, and just to add some icing on the cake the Jan expiry has its zone at 4600, so all in all a win: win situation.

That’s pretty much it for the good news though…unless you’re a vol trader that is.

The respective Y ratio bandwidths are actually slightly wider this expiry (Y1 = 235 & overall 435) but what is different is that they are almost evenly spaced out on either side of the zone.

This makes today very interesting for this expiry, as currently they are below their zone and therefore in bear territory.

To put this into perspective, yesterday in the FTSE it opened very weak, then went below its zone, but once it recovered from this dip it traded for the rest of the day right in the middle of its zone, around 7200 for those that don’t know.

So, for the SPX, the first target for today should be to regain its zone, then after that to hold onto it. Should it be particularly confident then it could even reclaim the bullish territory above its zone.

Considering what’s happening covid-wise at present, we think this is actually a very positive outcome considering. The question is whether it is just as a result of the market rebalancing itself post the Dec expiry (which gets our vote) or the bulls are back in town and have their sights still set on a Santa rally.

Of course, it could be a combination of these factors or something else entirely, but whatever it is then, you won’t get any ratio support until 4495 or resistance until 4730, so best plan accordingly.

 

Range:            4495  to  4595           

Activity:          Moderate

Type:              On balance decently bearish

 

Available to buy now

The faction account of the Big Bang, The Great Storm and the market crash of 1987, available in eBook and paperback here, a must read if you don’t believe in history repeating itself.

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December 20th, 2021 by Richard

As the FTSE Jan expiry starts there is an awful lot of minimal Y ratio around.

 

Nb. Our comment from the 12/16/21 (Not published)

Nb. Our comment on 12/20/21

 

In our last comment on the December expiry, we said “then holding this market between 7250 and 7350 should be the order of the week” and as the EDSP was 7264.53 we can only surmise that they did a good job.

However, quite often the settlement of one expiry can lead to problems for the next one, especially if the zones are not aligned.

And although this is the case here, the discrepancy isn’t so great and anyway there is a hundred points of the very minimal Y1 ratio above the January zone.

This should make for a very decent start to this expiry, as this 100-points of Y1 ratio together with a 100-points of the zone means that there is plenty of space for this index to play around in.

The one word of caution is that in just a few days, which you can see by comparing the two tables above, there has been a huge loss of Y ratio already. Although this may not continue, it is perhaps wise to be aware of the trend.

Also, January is a 5-week expiry and this, the first “extra” week can therefore sometimes be very quiet, although with everything that’s going on at the moment, we can’t see it getting away with this in the current climate.

Otherwise, looking at the above table, it is obvious there is far more ratio above the zone than below it, although this bias has been undone by the recent activity to a large extent, it is still significant and may yet come into effect as this expiry progresses.

In the meantime, obviously 7250 is the first critical level to watch out for, thereafter the next ones are in the table above for you.

 

Range:            7250  to  7350       

Activity:          Strong

Type:              On balance bearish

 

Available to buy now

The faction account of the Big Bang, The Great Storm and the market crash of 1987, available in eBook and paperback here, a must read if you don’t believe in history repeating itself.

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December 14th, 2021 by Richard

Can the SPX regain 4700 for the rollover and expiry?

 

Nb. Our comment from the 12/07/21

 

And today supplies the first real surprise of this expiry, as the zone returns to 4495-4505.

When we last commented we did say that this level seemed very reluctant to relinquish its crown but, over the intervening period, 4700 had been consolidating its presence.

This is why, the sudden reversal today comes as such a surprise.

We do normally point out that the triples are a bit like turning a supertanker, in that it takes time and that sometimes all the effort required is not that obvious.

But, as it is the rollover next week, where the zone is, or where it will be, now takes on a huge importance.

In the meantime, and totally in character with the inherent weirdness ever present in this expiry, the market continues to behave as if the zone is still at 4695-4705.

As we quite often say, we just crunch the numbers and the only subjective view of that is our interpretation of the resultant answers.

Who is to say it won’t revert straight back?

But, for today at least, there has been a steep fall in the ratios below 4700.

And again, in keeping with the weirdest expiry ever, who’s to say that the zone could not in fact stretch from 4495 all the way up to 4705.

In a way we now look back with fondness when this market just kept on knocking on the retreating R1 ratio door, as at least then we knew where we were, as even now we still don’t really have an idea of this market’s sensitivity this trip.

On a more positive note, with essentially 200-points of absolutely minimal ratio there could be some decent moves. By which we don’t meant the one to one and a half percent point moves of late, but some more meaty three to four percent moves. Just don’t forget whipsaw is just as much as likely under these conditions. Good luck.

 

Range:            4505  to  4705           

Activity:          Poor

Type:              On balance only just bullish

 

 

Nb. Our comment for 12/14/21

 

In the end the zone here did “revert straight back”, which we did tweet. So, from the 8th onwards the zone has been 4695-4705, making that one day it slipped the oddity.

But it is always good to keep everyone on their toes as, at the end of the day, the ratios are entirely derived from activity which as we all know that can be very fickle.

And, although we have learned to never say never, the ratios below the zone have now filled in sufficiently for us to feel confident that the zone is really where it wants to be.

The big trouble with this though, is that Y2 starts on the upper boundary.

The upper boundary in itself is a hurdle but, add in Y2, and that just reinforces it.

On Wednesday 8th the intraday high was 4705.06, then we had to wait again until Friday 10th before it ventured back there again, which resulted in the intraday high of 4705.38 for most of the day except the very last 10 minutes.

Which is a bit cheeky. But hey, you get away with what you can naturally. But we can’t help feel that this last-minute try-on on Friday really didn’t help this market come Monday morning.

Which really changed the complexion of this rollover and expiry we feel, as rather than just hold around the zone it now has to try and recover it from bear territory, which we feel is the harder to achieve especially if there is any nervousness about.

Please remember what we said in our comment about the FTSE100 on Monday, in that expiries produce heightened activity which can often be misdiagnosed.

Otherwise, it is really for the derivatives to lose this expiry now, as the market is in or around its zone, with a lot of very minimal ratio around it, and with just a day to go to the rollover. And if they can nail that, then the pressure is off for the actual expiry.

Also, and we appreciate that this expiry is so huge overall that it is hard to register anything but “poor” levels of activity but, even so, the levels we have been seeing over the last few days have been pretty dire.

 

Range:            4495  to  4695           

Activity:          Very poor

Type:              On balance only just bearish

 

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