The FTSE tries to escape the ratios in July expiry

After the July expiry proved very expensive for someone, the FTSE tries to rebound from the ratios in July.

 

Nb. Our comment from the 06/20/2022 (Not published)

Nb. Our comment on 06/22/22

Obviously, there were some huge changes in the ratios in the last few days of the June expiry but, sadly we were not around to record them, so who knows.

The one thing for certain though, is that it must have gotten seriously out of control, as even if June’s zone ended up where July’s has started, it was still a huge miss on Friday as the EDSP was 7108.24.

Not only that, when we shut up shop, B1 was at 7150. Of course, it would have fallen, and considerably so, but there is no escaping that at the end the market would have been amid a considerable amount of ratio. So, very very expensive for someone.

Which brings us round to this new expiry, the July trip.

And, straight from the very start, the FTSE was imbedded deep into some high ratios.

In a triple we always say it gets very heated, and naturally seeks out the higher ratios to compensate for the huge increase in overall activity. However, this is an intermediary, so it should revert back to being sensitive to the low to mid-range R ratios.

And yet, here it was, starting life just a smidgen north of DR. Quite the rude awakening.

Also, we are not overly surprised with the battle that took place all day yesterday at 7150, as this is a very significant level.

One look at the above table tells you that.

In fact, the ratios are so lopsided this expiry, it is now dangerous being short. Foolish not to have at least extremely tight stops.

7150 will decide whether or not this market digs itself out of a ratio mess, and can head back up to its zone, or not. Big call.

 

Range:            6850  to  7150        or        7150  to  7350      

Activity:          Outstanding

Type:              On balance only just bearish

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June 22nd, 2022 by