Nb. Our comment from the 06/16/21 (Not published)
Nb. Our comment on 04/20/21
It wouldn’t be right if we didn’t start off commenting on the end of the last expiry, and although the zone was 6650-6750, this was an unrealistic target in the end, but as the Y ratios stated just below 6900, then anywhere below here would have been acceptable we think.
In the end the EDSP was north of 7000, and as DR started at 6950 in the final calculations, B1 having slipped to 7100, there is no other way to describe this but as an outright win for the all-time-high chasing equites, and a dismal, not to mention very expensive, failure by derivatives.
Looking ahead, into the 5-week May expiry, and the ratio levels are there for all to see, so all that remains now is to see is how aggressive this market might continue to be?
To be fair, we saw something similar when QE was all the rage, as if this isn’t the same, and when you start to print money like every country has been, rationality and fundamentals can fly out the window.
It really does seem like this century politicians are terribly afraid of a weak market, and no, we don’t know why, but they do seem to splurge the cash at the faintest whiff of trouble.
Anyway, as things stand this expiry, it looks like 6950 is going to be the key level.
As above it they will continue to duke-it out against the R ratios, but below, well, then that’s an awful lot of Y ratio.
However, at the moment it is stuck in a very narrow R2 ratio bandwidth (7000 to 7050) and was yesterday a bandwidth test, probably not with the intraday high just 7040.26, but with the market closing right on R2, we should know soon enough whether they still have the stomach to buy all those dynamic delta futures.
Range: 7000 to 7050
Activity: Very good
Type: On balance only just bullish