Oct
11
2021
October 11th, 2021 by Richard

Can the FTSE, or does it even want to, break free of its zone for the rollover and expiry?

 

Nb. Our comment from the 10/04/21

And “happily languish” it was, as the FTSE stayed zone-bound practically all week.

The first four days were all about the upper boundary, and on Thursday so much so we actually checked to see if the zone had moved to 7050-7150, as this is still very much on the cards (please see our last note above).

It hasn’t, but the hedge ratio is so small we are seriously considering making the zone 7000-7150, and although we haven’t, it is perhaps worth thinking of it as such.

On Friday, it was all about the bottom boundary, where it has in fact dropped to Y1 from Y2, and had done so for that day as well.

But the market opened weak, again please ignore the “official” 7086.42, as it was almost 100-points below that…misleading or what, but as they say in system (aka algo) trading about data, “crap in crap out”, and the intraday low of 6989.64 was just after the open. The fact it was now contending with just Y1 meant the support the market received was all the more impressive, as it never looked back or even suggested it was going to test the bottom boundary at 7000 again.

Of course, the market could continue to “languish” in its zone, by which we mean 7000 up to 7150 but this would be a real waste of a great opportunity, especially as we are just at the half-way point of this expiry.

Naturally, we are referring to the fact that R1 above the zone still does not kick in until 7250, and as the market has already tested this ratio level below the zone it is only appropriate that it should test this corresponding ratio at the other end.

It is the easiest path to a new all-time high this market has had all year, so it would be almost criminal to waste it, but at the same time understandable as it got such a bloody nose trying this in the Sept expiry.

Of course, only time will tell, and October is always a strange month, but what a chance it has so it really would be a shame to waste it.

 

Range:            7000  to  7100 (7150)       

Activity:          Average

Type:              On balance bearish

 

 

Nb. Our comment on 10/11/21

 

Out of all the indices, the FTSE is always the most likely to lack motivation.

It was easily the last to register a new all-time high recently, and overall, its performance this year comes in last by a long way, the winner being twice as high and even the second to last outrunning the FTSE by over 5%.

Of course, there are many reasons for this, but to us this is simply a by-product of the hedge ratios, as the poor old FTSE has had them in its path all year, until now that is.

In contrast, the SPX has had very little ratio above it to hinder its path.

This is why it is so sad to see it languish in its zone, at the very time it has clear skies above, tragic even.

For those who have read our previous comments there can be no surprise to hear that the intraday low on Monday was 7002.72, then the bottom boundary tried to assist again on the Wednesday but ultimately failed, with the market then going on to test R1 at 6950 (low 6945.50) for about an hour and a half, before returning to its zone.

Normally the awakening of the bulls by this test, being bolstered and empowered by the dynamic delta inspired futures buying, is enough to give it sufficient momentum to power on up but, sadly here, the FTSE still couldn’t break through its zone’s upper boundary at 7100 (intraday highs Thu & Fri 7094.93 and 7109.34 respectively).

To be zone-bound for so long is ultimately frustrating, albeit rather lucrative for derivative sellers, so as we enter the rollover and expiry week this can easily boil over, which we have seen many times in the past in this very same scenario.

It is still just Y1 above the zone, although Y2 now kicks-in a bit earlier, the important R1 remains at 7250. So, the opportunity is still there, but unless the market starts to exhibit a lot more conviction, the derivative players would be more than happy to see it remain zone-bound for the next three days for sure.

 

Range:            7000  to  7100 (7150)       

Activity:          Moderate

Type:              On balance only just bearish

 

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Oct
06
2021
October 6th, 2021 by Richard

4295 and 4345 as well as the zone have been critical this expiry for the SPX

 

Nb. Our comment from the 09/28/21

 

We feel we should give the SPX some leniency, as over the years we have been calculating the ratios the width of the zone has stayed the same, whereas the market itself has increased significantly.

So, a 10-point zone is now only 0.23% of a window for the index to aim at.

Considering this, we think it has done exceedingly well, especially as this index is bit of a juggernaut, as last Thursday it closed at 4448.98, then on Friday 4455.48 and yesterday it missed the bottom boundary by just under 2-points, closing at 4443.11.

In the case against leniency, we have said in the past “a miss is as good as a mile”, and let’s face it, this index had every opportunity on Friday to make decent inroads above the zone and back into bullish territory.

It does make for a difficult call, as on the one hand it has already bounced off Y2 below the zone, and having regained its zone this normally means the momentum is back with the bulls.

But, the failure to hold their zone can’t be ignored either.

The fact that the last three trading days have been in or around its zone we also think is symptomatic of a market that can’t decide.

This is also borne out by very low levels of activity over the last three days.

Also, having just spent so many expiries where the market has been content to keep knocking on the retreating ratios door, this type of behaviour is both new and difficult to get an understanding of how deep it goes.

However, first and foremost, we wholeheartedly welcome back the normality of a market that tests support and resistance either side of its zone, as this is simply just a far healthier methodology, which in no way deducts from an underlying trend, but rather strengthens it.

With this in mind, we are not yet ready to call a sea-change in attitude, but rather welcome back a more normal and sane market while the jury is out.

 

Range:            4345  to  4445           

Activity:          Very poor

Type:              Bullish

 

 

Nb. Our comment for 10/06/21

 

The jury (please see above) didn’t really take long to decide, and it certainly wasn’t in favour of the bulls.

In our first note of this expiry, and therefore repeated in our second, we took pains to point out that at the very start of this expiry Y2 was at 4295.

It may have jumped to 4345 but, the reason we highlighted 4295 was because it still represented a step-up in ratio and that it had been tested on the very first day of this expiry, with the intraday low of 4305.91 on the 20th Sept.

The market then recovered back to its zone, which was where it was in our last comment, before finishing that week at 4357.04 having been as low as 4288.52.

The point of mentioning all this is to highlight the significance of these levels throughout this expiry so far.

On this Monday 4th Oct we saw the intraday low of 4278.94, and which being strike 3 was a very impressive hold, resulting in the close yesterday, coincidentally back at our old friend 4345.

And as one can see in the table above, Y2 is back to where it was and all the other ratios below the zone have slipped back as well.

It is not yet over for the bulls, after all there is still a week and a half to go in this expiry, but it is looking rather dire, as if they don’t react today, perhaps tomorrow, then we could very likely see the zone start to move down.

Early days, but 4345-4355 is looking likely, and if that does happen it will obviously have ramifications for the rollover and actual expiry.

In the meantime, 4295 is now on strike 4, and as these ratios are also now receding, support here is going to be a very big ask indeed.

At the moment this index’s saving grace is where its zone is currently, but watch this space as its not going to get any quieter as we head towards the final week, and that’s for sure.

 

Range:            4295  to  4445           

Activity:          Poor

Type:              On balance only just bullish

 

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Oct
04
2021
October 4th, 2021 by Richard

Can the FTSE hold its zone for this week as well.

 

Nb. Our comment from the 09/27/21

Again, we have to harper on about the data, and if you believe the muck that is the official stuff then all we can say is more fool you.

Last Monday was all about R1 at 6950, and the official open was 6963.64, which is blatantly rubbish (we are finding it hard to be polite btw) as it was nearer 6883, which means R1 didn’t really have a chance. Or more importantly, the dynamic delta, which in this instance would have been futures buying, didn’t even have a chance to kick-in.

Then again, on the Tuesday, the official open was 6903.91, but back in the real world it was actually nearer 6945. Which again, is highly significant, as that is right on R1.

Once that had been “recaptured” then it was all going to be about the zone. The intraday high on the 21st was 7004.88 for example. Then we were again back into the realms of fantasy, with the open on the 22nd officially being 6980.98, but in fact it was nearer 7034, which puts it firmly back inside its zone.

The intraday high of 7090.48 providing the first test of its zone’s upper boundary, and by definition this also meant it was a zone bandwidth test (both ends in a day).

Normally, this means a breakout the next day, which it almost achieved, getting as high as 7131.43, but for some reason then capitulated.

This was bit of a surprise to us, as above 7100 it is only the minimal Y1, which is in fact so minimal we could easily see it becoming the next zone, so it really doesn’t carry much dynamic delta at all. If fact so little it would be hard to distinguish from normal everyday futures activity.

But, the zone itself is a safety haven, and we suspect this is what it is all about, and on twitter we have been mentioning synchronicity a lot, as the SPX also ended the week in its zone having followed a very similar path to the FTSE in its first week of the Oct expiry. Naturally “safety” also equals undecided, which is the natural place for a market to gravitate to should there be no great desire to take a side. So, this week, will be all about whether or not it wants to take a view, or just happily languish.

 

Range:            7000  to  7100       

Activity:          Very good

Type:              Neutral

 

Nb. Our comment on 10/04/21

 

And “happily languish” it was, as the FTSE stayed zone-bound practically all week.

The first four days were all about the upper boundary, and on Thursday so much so we actually checked to see if the zone had moved to 7050-7150, as this is still very much on the cards (please see our last note above).

It hasn’t, but the hedge ratio is so small we are seriously considering making the zone 7000-7150, and although we haven’t, it is perhaps worth thinking of it as such.

On Friday, it was all about the bottom boundary, where it has in fact dropped to Y1 from Y2, and had done so for that day as well.

But the market opened weak, again please ignore the “official” 7086.42, as it was almost 100-points below that…misleading or what, but as they say in system (aka algo) trading about data, “crap in crap out”, and the intraday low of 6989.64 was just after the open. The fact it was now contending with just Y1 meant the support the market received was all the more impressive, as it never looked back or even suggested it was going to test the bottom boundary at 7000 again.

Of course, the market could continue to “languish” in its zone, by which we mean 7000 up to 7150 but this would be a real waste of a great opportunity, especially as we are just at the half-way point of this expiry.

Naturally, we are referring to the fact that R1 above the zone still does not kick in until 7250, and as the market has already tested this ratio level below the zone it is only appropriate that it should test this corresponding ratio at the other end.

It is the easiest path to a new all time high this market has had all year, so it would be almost criminal to waste it, but at the same time understandable as it got such a bloody nose trying this in the Sept expiry.

Of course, only time will tell, and October is always a strange month, but what a chance it has so it really would be a shame to waste it.

 

Range:            7000  to  7100 (7150)       

Activity:          Average

Type:              On balance bearish

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Sep
28
2021
September 28th, 2021 by Richard

As the SPX loiters around its zone, eventually it must decide.

 

Nb. Our comment from the 09/21/21

 

The important aspect is that anyone who has read our comments over the last few expiries should have been in no doubt whatsoever about this potential pullback.

The only shame is that we still don’t publish the ending expiry ratio table next to the forthcoming expiry ratio table in the rollover week, as then you would have also known about which levels to watch out for.

Interestingly the zone in October has been very solid where it is, despite September’s jump to 4500. We say “interestingly” as just like the FTSE, where this index closed last Friday was below it, and therefore in bear territory.

However, the really critical level yesterday, was Y2 at 4340, as had you known that it was there you would have picked up on the support it gave this index for at least half an hour, before capitulating. The fact the market then went a further 35-points below it, had us looking at R1 as the next level but, and this was probably more to do with the DJX, it recovered. Also, on the very first day of an expiry, especially when markets are challenging virgin territory, the actual ratio levels can be somewhat formative, and as you can see in the above table, last Thursday Y2 was actually 4295. For the record, yesterday’s intraday low was 4305.91.

Perhaps more significant for today, was yesterdays close, which was back above Y2.

Possibly most important of all, it has seemingly galvanised everyone as we have now had two consecutive days of “strong” activity here, on what was otherwise shaping up to be yet another expiry when the market was stuck in automatic.

The end result of this has been the Y1 ratio bandwidth only being 190-points, and the overall Y ratio bandwidth just 345-points. Of course, these are still stupidly wide, but both are considerably less wide than they have been, and furthermore, at least so far, have reversed the trend of them actually growing wider.

Also, it has certainly kick-started this intermediary expiry into life early on, which will hopefully continue.

 

Range:            4340  to  4445           

Activity:          Strong

Type:              Neutral

 

 Nb. Our comment for 09/28/21

 

We feel we should give the SPX some leniency, as over the years we have been calculating the ratios the width of the zone has stayed the same, whereas the market itself has increased significantly.

So, a 10-point zone is now only 0.23% of a window for the index to aim at.

Considering this, we think it has done exceedingly well, especially as this index is bit of a juggernaut, as last Thursday it closed at 4448.98, then on Friday 4455.48 and yesterday it missed the bottom boundary by just under 2-points, closing at 4443.11.

In the case against leniency, we have said in the past “a miss is as good as a mile”, and let’s face it, this index had every opportunity on Friday to make decent inroads above the zone and back into bullish territory.

It does make for a difficult call, as on the one hand it has already bounced off Y2 below the zone, and having regained its zone this normally means the momentum is back with the bulls.

But, the failure to hold their zone can’t be ignored either.

The fact that the last three trading days have been in or around its zone we also think is symptomatic of a market that can’t decide.

This is also borne out by very low levels of activity over the last three days.

Also, having just spent so many expiries where the market has been content to keep knocking on the retreating ratios door, this type of behaviour is both new and difficult to get an understanding of how deep it goes.

However, first and foremost, we wholeheartedly welcome back the normality of a market that tests support and resistance either side of its zone, as this is simply just a far healthier methodology, which in no way deducts from an underlying trend, but rather strengthens it.

With this in mind, we are not yet ready to call a sea-change in attitude, but rather welcome back a more normal and sane market while the jury is out.

 

Range:            4345  to  4445           

Activity:          Very poor

Type:              Bullish

 

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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Sep
27
2021
September 27th, 2021 by Richard

Will the FTSE make a decision, or just languish in its zone.

 

Nb. Our comment from the 09/20/21

 

Turns out that there was just one last “hurrah” in the September expiry, and with the EDSP of 7031.68 it was all about the zone at the end.

Which is really what is all about in the October expiry as well, as here the zone is now 7000-7100, which is in fact slightly higher than it was in September.

This does however throw a degree of confusion over whether the support at 6950 on Friday was down to the hangover of Sept’s bottom boundary, or an early test of R1 in Oct.

Either way, it held firm, but it remains a very critical level in this expiry, meaning the first couple of days could decide the next 4-weeks.

If R1 doesn’t hold, and if you compare the two tables above, it has only very recently become R1 from Y2, then the market will find itself in a 250-point wide bandwidth.

Of course, we must also point out that currently this index is below its zone, so it actually starts this expiry already in bear territory, which won’t please many.

Furthermore, the terrible irony of it all, is that all that woe this index had in Sept trying to get past R2 at 7150 and then R3 at 7200 is now no longer a problem, with R1 above the zone not kicking in until 7250.

But, first things first, and that is a hold at R1, and then to recapture its new zone.

Finally, don’t forget that we are now back to an intermediary expiry, so everything gets taken down a notch, or at least it should, as overall activity is about a quarter of what we saw in September’s triple witching expiry.

 

Range:            6950  to  7000       

Activity:          Very good

Type:              On balance bearish

 

 

 

Nb. Our comment on 09/27/21

 

Again, we have to harper on about the data, and if you believe the muck that is the official stuff then all we can say is more fool you.

Last Monday was all about R1 at 6950, and the official open was 6963.64, which is blatantly rubbish (we are finding it hard to be polite btw) as it was nearer 6883, which means R1 didn’t really have a chance. Or more importantly, the dynamic delta, which in this instance would have been futures buying, didn’t even have a chance to kick-in.

Then again, on the Tuesday, the official open was 6903.91, but back in the real world it was actually nearer 6945. Which again, is highly significant, as that is right on R1.

Once that had been “recaptured” then it was all going to be about the zone. The intraday high on the 21st was 7004.88 for example. Then we were again back into the realms of fantasy, with the open on the 22nd officially being 6980.98, but in fact it was nearer 7034, which puts it firmly back inside its zone.

The intraday high of 7090.48 providing the first test of its zone’s upper boundary, and by definition this also meant it was a zone bandwidth test (both ends in a day).

Normally, this means a breakout the next day, which it almost achieved, getting as high as 7131.43, but for some reason then capitulated.

This was bit of a surprise to us, as above 7100 it is only the minimal Y1, which is in fact so minimal we could easily see it becoming the next zone, so it really doesn’t carry much dynamic delta at all. If fact so little it would be hard to distinguish from normal everyday futures activity.

But, the zone itself is a safety haven, and we suspect this is what it is all about, and on twitter we have been mentioning synchronicity a lot, as the SPX also ended the week in its zone having followed a very similar path to the FTSE in its first week of the Oct expiry. Naturally “safety” also equals undecided, which is the natural place for a market to gravitate to should there be no great desire to take a side. So, this week, will be all about whether or not it wants to take a view, or just happily languish.

 

Range:            7000  to  7100       

Activity:          Very good

Type:              Neutral

 

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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Sep
21
2021
September 21st, 2021 by Richard

Starting the Oct expiry below its zone was bit of a shock for the SPX it seems.

 

Nb. Our comment from the 09/16/21 (Not published)

 

Nb. Our comment for 09/21/21

 

The important aspect is that anyone who has read our comments over the last few expiries should have been in no doubt whatsoever about this potential pullback.

The only shame is that we still don’t publish the ending expiry ratio table next to the forthcoming expiry ratio table in the rollover week, as then you would have also known about which levels to watch out for.

Interestingly the zone in October has been very solid where it is, despite September’s jump to 4500. We say “interestingly” as just like the FTSE, where this index closed last Friday was below it, and therefore in bear territory.

However, the really critical level yesterday, was Y2 at 4340, as had you known that it was there you would have picked up on the support it gave this index for at least half an hour, before capitulating. The fact the market then went a further 35-points below it, had us looking at R1 as the next level but, and this was probably more to do with the DJX, it recovered. Also, on the very first day of an expiry, especially when markets are challenging virgin territory, the actual ratio levels can be somewhat formative, and as you can see in the above table, last Thursday Y2 was actually 4295. For the record, yesterdays intraday low was 4305.91.

Perhaps more significant for today, was yesterdays close, which was back above Y2.

Possibly most important of all, it has seemingly galvanised everyone as we have now had two consecutive days of “strong” activity here, on what was otherwise shaping up to be yet another expiry when the market was stuck in automatic.

The end result of this has been the Y1 ratio bandwidth only being 190-points, and the overall Y ratio bandwidth just 345-points. Of course, these are still stupidly wide, but both are considerably less wide than they have been, and furthermore, at least so far, have reversed the trend of them actually growing wider.

Also, it has certainly kick-started this intermediary expiry into life early on, which will hopefully continue.

 

Range:            4340  to  4445           

Activity:          Strong

Type:              Neutral

 

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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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Sep
20
2021
September 20th, 2021 by Richard

The FTSE even starts the Oct expiry in bear territory.

 

Nb. Our comment from the 09/17/21 (Not published)

Nb. Our comment on 09/20/21

 

Turns out that there was just one last “hurrah” in the September expiry, and with the EDSP of 7031.68 it was all about the zone at the end.

Which is really what is all about in the October expiry as well, as here the zone is now 7000-7100, which is in fact slightly higher than it was in September.

This does however throw a degree of confusion over whether the support at 6950 on Friday was down to the hangover of Sept’s bottom boundary, or an early test of R1 in Oct.

Either way, it held firm, but it remains a very critical level in this expiry, meaning the first couple of days could decide the next 4-weeks.

If R1 doesn’t hold, and if you compare the two tables above, it has only very recently become R1 from Y2, then the market will find itself in a 250-point wide bandwidth.

Of course, we must also point out that currently this index is below its zone, so it actually starts this expiry already in bear territory, which won’t please many.

Furthermore, the terrible irony of it all, is that all that woe this index had in Sept trying to get past R2 at 7150 and then R3 at 7200 is now no longer a problem, with R1 above the zone not kicking in until 7250.

But, first things first, and that is a hold at R1, and then to recapture its new zone. Otherwise it’s a long way down to R2 support.

Finally, don’t forget that we are now back to an intermediary expiry, so everything gets taken down a notch, or at least it should, as overall activity is about a quarter of what we saw in September’s triple witching expiry.

 

Range:            6950  to  7000       

Activity:          Very good

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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Sep
14
2021
September 14th, 2021 by Richard

The SPX zone eventually moves, now it can get on with the rollover and expiry.

 

Nb. Our comment from the 09/07/21

 

After the first week when the SPX made full use of its enormously wide Y1 ratio bandwidth by effectively traversing the entire width of it, last week must have come as bit of a shock.

And there is no doubt about it, but the last week was all about this index struggling to make any more forward progression now it was deeply into the Y2 ratio.

Although this has not been uncommon of late, it is still rather sad, as even Y2 is classed as “minimal”. Especially in a triple.

Anyway, we have eventually seen some movement in Y2 above the zone, as it has now slipped to 4530.

The significance being that, with this level now in retreat, coupled with the market being practically at the same point now, then it is decision time for this index.

Whether to continue to struggle in Y2, or retreat back into the far more comfortable Y1 ratio bandwidth.

If it does choose the latter, then further forward movement could well be limited to how quickly Y2 continues to retreat.

All the while there remains a spectacularly wide Y1 ratio bandwidth beneath it, which still goes all the way down to 4220, a mere 310-points away.

Of course, there is the zone before then, so should the market indeed turn south, then this should provide the first line of support.

But if the SPX follows the pattern of the last few expiries, then we should see it bumping along behind Y2, knocking on that door and hopefully forcing that retreat to at least continue, if not accelerate.

In the meantime, we haven’t seen an expiry recently that the zone itself hasn’t moved up, so come the rollover and expiry next week, even that target could very easily be a lot higher. But all the time the huge Y ratio bandwidths beneath this market will be there, so that risk will also be ever-present.

 

  Range:          4405  to  4590           

Activity:          Poor

Type:              On balance bearish

 

 

Nb. Our comment for 09/14/21

 

And there we have it! The SPX’s zone moves up to 4495-4505.

TBH, it has been a bit like watching paint dry, this move having been flagged for so long.

Furthermore, it has created bit of a schizophrenic index in all truth, as on the one hand the siren-like call of the zone when it was down at 4395-4405 had the market being called in that direction.

However, it was obviously somewhat reluctant, and not just for those stale bulls who had fought so hard with Y2 just the week before but, because the move up to 4495-4505 was imminent any day.

Hence it was sort of stuck in no-man’s land between the two.

One sort of feels that now this has eventually happened, the real rollover and expiry can get underway.

In the meantime, it is going to make for a very interesting day today, as for the first time this expiry, the SPX is now actually below its zone, and therefore, by definition, in bear territory.

If nothing else, this should at least galvanise those bulls, and whether or not they succeed in getting back to the (new) zone for the rollover tomorrow is going to be the big question, a question with very interesting consequences if they don’t.

Interestingly, and as is quite normal these days, we have seen a lot of writing of otm puts, and what with just days to go this can be seen by some as “safe” money, so getting back to the new zone will be rather important to these traders especially.

Overall, the Y1 ratio bandwidth is now 295-points, with the total Y ratio bandwidth coming in at 435-points, so a slight narrowing, but not by anything significant.

This really means that the zone has moved up inside the Y1 ratio bandwidth, rather than being forced in this direction by bullish activity, which is ok, but not representative of a true bull market. Still, it makes for an exciting expiry at least.

 

Range:            4245  to  4495           

Activity:          Average

Type:              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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Sep
13
2021
September 13th, 2021 by Richard

Can the FTSE hold in its zone for the rollover and expiry?

 

Nb. Our comment from the 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

 

 

Nb. Our comment on 09/13/21

 

The FTSE certainly did go for “one more last hurrah” on last Monday, fortuitously the day we posted, as it went on to trouble R3 at 7200 with the intraday high of 7195.62.

To be honest we sought of expected a bit more gusto than that but, upon reflection, what with the meal they made out of the ratio at 7150 then this lack of more fight is perhaps more understandable.

And talking of this index’s nemesis this expiry, 7150 was the crucial level on Tuesday.

The real time close was 7152.75, so to give that up in the auction and finish below it at 7149.37 was very revealing, and the first really significant ratio point last week.

After testing the top of its zone, the very next day, Wednesday 8th, with the intraday low of 7061.13, it was the Thursday that supplied the second significant ratio point.

And there was no mucking about as it was the open, that we had circa 7038, which is again nowhere near the official 7095.53 (but you know already why this is false data), that leap-frogged the market over its upper boundary and into its zone.

Then on the Friday, and we don’t think anyone was left in any doubt about the bullish sentiment seemingly ever-present in the FTSE, as it literally spent almost the entire day trying to get back above its zone’s upper boundary at 7050.

Unless this sentiment suddenly grows a pair, then we can’t see much else than this index staying zone-bound, or at least until the rollover on Wednesday.

Quite often the hugely increased levels of activity generated by the rollover and expiry, even more so in a triple, can be misdiagnosed and used by bulls (or bears) to justify their own agenda.

This may well happen, but if derivatives can hold the index inside its zone for at least the rollover, then there will be a lot of smiley people out there.

 

Range:            6950  to  7050       

Activity:          Poor

Type:              Bearish

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