Today’s ratios levels FTSE & DAX and a look ahead to the Aug expiry

As we said there is now no need for the FTSE to stay inside the zone, and it hasn’t, right on cue.

Ironically in doing so, although this close to the settlement the cause is a bit chicken and egg, but the falling ratios have thrown up the distinct possibility that the NZ may well move to 7450-7550, but with just hours to go this is immaterial.

However for the record the ratios have fallen across the board, so much so we see the return of the Y ratios below the zone.


Range:            7450  to  7550

Activity:          Poor

Type:               Bearish



Although July’s NZ is seemingly just a day away from joining Augusts’ at 7450-7550 this expiry is still signalling that it may in fact join July’s at 7350-7450.

Of course this expiry has 4 weeks to run so it has the potential to change whereas July is pretty much a done deal.

Where the NZ starts is obviously crucial to our forecast for the next 4 weeks but as things stand then the range is a massive 7600 to 7250, a impressive 350 points and on the top side it is backed up by R3, a jump of a complete level, at 7650, which for us is bit of a line in the sand.

On the bottom half R2 is 100 points below R1 and the current market is a lot closer to the top of this range than the bottom.


Range:          7450  to  7550

Activity:        Very good

Type:             Bearish



We can’t say the DAX didn’t try to get back to its NZ as it managed to get as high as 12575 but it never seemed to have any conviction.

It is in a 200 point bandwidth of the minimal Y1 ratio that can easily become the next zone, especially at this point of time in an expiry, so it is very close but sadly no prize this time.

For us the operative word here would be conviction as it was doing fine and very early too but after that scare on Tuesday when it lost 157 points it never really recovered, or seem to have the desire to do so, therefore they evidently think this is good enough.


Range:            12250  to  12550

Activity:          Poor

Type:               Bullish



However August is taking no chances and the NZ here has dropped considerably and with just 3 points in it on a twelve thousand point index we have nevertheless placed it below the zone for one reason.

That is the auction added 15.26 points so in real time the market actually closed at 12431.

One of the problems of a NZ having to adjust, unlike London, is that it distracts from allowing the ratios to build and so you can get a situation like this where there is still 900 points between the R1’s.

Don’t forget last expiry this index went from Y2 at 12950 all the way down to R1 at 12300 which is 650 points so it’s not impossible.


Range:           12300  to  12450     or     12450  to  12550

Activity:         Very strong

Type:              Neutral

July 21st, 2017 by