Category: Uncategorized

May 13th, 2019 by R1chard

Nb. Our comment from 04/30/19

Already it seems the zone here in the FTSE is having a major impact.

On Friday last week the intraday high was 7442.39, and we are more than happy to call that strike one of the zones upper boundary.

And, yesterday, the market basically camped out on it for the last two and a half hours of the trading day, so definitely strike two.

For the record the actual intraday high was 7456.49.

Interestingly, the ratios above and below the zone have slipped.

Below R2 slides to 6900, whereas above both R3 and DR move out by 50-points.

Nevertheless, the situation remains the same, as in we believe the best place for this market is in its zone (7350 to 7450), as above it R2 is still waiting to ambush it at 7550, whereas below we don’t even see the R ratios start until 7050.

So, all in all, if it can hold within its zone, we think it will be doing well, as if it gets aggressive it could easily get a bloody nose, and if that shakes loose the bears then it is a long way down before it will find any ratio support.

Range:            7350  to  7450

Activity:          Moderate

Type:              On balance not bullish

Nb. Our comment on 05/13/19

As you can see from our comments above, back on the 30th April, the market was all about the upper zone boundary at 7450.

At that time, we hoped it would stay within its zone, and it almost did, as the remainder of that week, it was all about the lower zone boundary.

The intraday high on the 30th was 7451.32, then on the 1st it was 7446.46, followed by a spike down to 7339.45 but the close on the 2nd was at 7351.31, and most of that day was spent in or around the lower zone boundary.

The intraday low on that Friday was in fact 7350.01.

Of course, our fear about breaking out of its zone was because back then it was all Y ratio down to 7050.

Needless to say, the ratios evolve, so in the two weeks since our last comment you can see how much it has changed by just comparing the two tables above.

It hasn’t quite got down to 7150, and it would be nice if it did, but after the SPX got as low as 2825.39, incredibly close to where we had our R1 and an astonishingly close call considering we stated that was our level for the bounce when that market was nigh on 2900, before finishing up 11-points at 2881.40, we suspect London has had its chance.

This week it’s the rollover, so the focus should be on recapturing its zone, so our old friends and acquaintances 7350 and 7450 will, or should be, back in the frame this week.

Range:            7150  to  7350          

Activity:          Average        

Type:              On balance just fractionally bearish           

Posted in Uncategorized

May 10th, 2019 by R1chard

Nb. Comment from 05/06/19 (Not published online)

It has been a very long time since we last commented on the DJX, but eventually we are seeing those daily 200-point moves we have been expecting.

Of course, this was back in the last expiry, but as you can see from the above table the zone is still huge, so naturally we would be expecting the same in the May expiry.

The interesting part though, has been how close it has stayed to the centre of its zone, namely 26500, as in two entire weeks the furthest it has strayed is the measly 200-points.

Worth noting, the last fortnight closes in chronological order were, 26511, 26656, 26597, 26462, 26543, 26554, 26592, 26430, 26307 and 26504.

And we are already at the mid-point of this expiry, so the rollover actually starts next week, so we rather doubt things will remain so unadventurous.

Also, worth noting, is this index is very similar to the SPX, in that there is an awful lot of Y ratio should it test and breach its zones lower boundary.

This makes 2895 and 26000 both critical levels.

So, make sure and watch out for confluence, where they both test their respective levels at the same time.

Range:      26000  to  27000           

Activity:    Average     

Type:         Neutral

Nb. Comment on 05/10/19

Wow. In a word.

Never ceases to surprise do the ratios and when we last looked (6th May) we thought the zone was ridiculously wide then, so we just don’t have the words to describe what it is now.

Obviously, since our last comment, here in the DJX the crucial level was 26000, being the bottom of the zone back then, so Tue and Wed price action was very important.

The close on the 7th was 25965, so right on the boundary, and, as it turns out, crucial it was those few points on the wrong side.

Wed saw an intraday high of 26118, so nice try, but the close at 25967, again shows it on the wrong side, albeit just.

Of course, now it’s no longer an issue, and this index has an astonishing 2000-points of zero ratio to play around in now.

So, basically strap yourself in, as this combined with the rollover next week, means for us, quiet it won’t be.

Perhaps worth pointing out that activity is high because the benchmark is still exceedingly low, although with such a wide zone that’s pretty obvious.

Range:            25000  to  27000             

Activity:          Very good       

Type:              Bullish

Posted in Uncategorized

May 9th, 2019 by R1chard

Nb. Our comment from 04/29/19

Well it has certainly been bit of a quiet start to the May expiry, although things could become far more interesting now the market is just below a test of R1.

The only change in the ratio above the zone is Y2 comes in ever so slightly.

Below the zone there are two changes, Y2 comes in to 2815 and R1 to 2775.

However, neither of these are significant enough to change the overall picture as there is still a sea of minimal Y ratio below the zone that stretches for 120-points.

Don’t forget, when you add in the zone itself and the Y ratio above it that is another 60-points.

So, the fact remains, this market remains very susceptible to any shocks, to the tune of almost 6%.

First things first, and a test of R1 at 2955 would go a long way to establishing what this market really thinks, as bumbling around in the Y ratio like it has been, doesn’t mean anything, well apart from a large degree of apathy.

Range:            2905  to  2955

Activity:          Moderate

Type:               On balance bearish

Nb. Our comment on 05/09/19

A lot has happened since our last note, most notably was the test of R1 at 2955, with the intraday high of 2954.13 on the 1st May, followed swiftly by someone saying “boo”.

For those that had taken a note of our last ratio table then they would have seen the normal pattern emerge.

Being, down to the middle of the zone, intraday low 2900.50 before a decent recovery, but knowing where R1 was, not going there again.

Then, this week it has all been about the zone, intraday low on Monday of 2898.21 was a test of the lower boundary, please don’t forget the Vega as the open was nigh on the upper boundary and that represented a drop of 36.75-points in itself.

2895 and 2905 saw considerable action the next day, but didn’t provide any highs or lows.

The most significant aspect that day was the close at 2884.05, just a smidgen shy of their lower boundary, but still a close in bear territory (i.e. below the zone).

Reinforced by the intraday high on the following day, Wednesday, being 2897.96, a valiant but ultimately a failed attempt to recapture the zone.

Which brings us neatly around to today, and it is really good to see the ratios below the zone improving, and perhaps no surprise the intraday low yesterday was 2873.28.

This makes Y2 critical today of course, but for us, our eyes are on the corresponding R1 ratio level now at 2815, as that for us will be key.

Range:            2815  to  2895           

Activity:          Moderate         

Type:              On balance just bearish            

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April 30th, 2019 by R1chard

Nb. Our comment from 04/26/19 (Not published online)

Despite the fact we last published on the 15th here in the FTSE it has only been seven trading days, but, of course, in those seven we have started an entirely new expiry, May.

The fact that this market is inside its zone is a very good thing we feel, giving it room to breathe and move, without having to test any ratio levels.

It was interesting to see the intraday highs on the first two days of this expiry being 7528.93 and 7523.79, which, as you can see from the table above, is tantalisingly close to a test of R2.

This is made all the more significant as that is a big jump from the minimal Y ratio straight into the mid R ratio, which don’t forget are exponential.

The real aspect to watch out for is any breach of the bottom boundary, at 7350, as that is an awful lot of Y ratio below there.

All the way down to 7050 in fact, a rather worrying 300-points.

Also, noteworthy, is the similarity to the SPX, in that there is a lot of Y ratio below their zone as well.

Activity, especially for May, and it being an intermediary to intermediary expiry, is surprisingly high, but, overall, it is still a very lopsided expiry and one that is still very underdeveloped.

Range:            7350  to  7450

Activity:          Very strong

Type:              Neutral

Nb. Our comment on 04/30/19

Already it seems the zone here in the FTSE is having a major impact.

On Friday last week the intraday high was 7442.39, and we are more than happy to call that strike one of the zones upper boundary.

And, yesterday, the market basically camped out on it for the last two and a half hours of the trading day, so definitely strike two.

For the record the actual intraday high was 7456.49.

Interestingly, the ratios above and below the zone have slipped.

Below R2 slides to 6900, whereas above both R3 and DR move out by 50-points.

Nevertheless, the situation remains the same, as in we believe the best place for this market is in its zone (7350 to 7450), as above it R2 is still waiting to ambush it at 7550, whereas below we don’t even see the R ratios start until 7050.

So, all in all, if it can hold within its zone, we think it will be doing well, as if it gets aggressive it could easily get a bloody nose, and if that shakes loose the bears then it is a long way down before it will find any ratio support.

Range:            7350  to  7450          

Activity:          Moderate        

Type:              On balance not bullish            

Posted in Uncategorized

April 29th, 2019 by R1chard

Nb. Our comment from 04/25/19 (Not published online)

As this is our first coverage of the May expiry there is no previous comment.

However, in our final comment for April we stated “Our money is on it shifting to 2895-2905, as back at the start of this expiry this was R2, nudging on R3, so that is a precipitous fall in the ratio down to Y1”, in respect of the zone.

So really there should be no surprise where May’s zone is, or the fact the expiry last Thursday was 2905, right on the upper boundary.

As we said back then, the SPX does not seem to have any emotions, bullish or bearish, it seems to be curve-fitting more than anything else.

However, in doing so it has just made the situation even worse, as there is now even more minimal ratio below the zone.

Of course, it needs something to cry “BOO!” and catch the market by surprise, but if that does happen then it is worth being aware that R1 below the zone doesn’t even appear until 2770, well over 100-points away.

It remains to be seen if this index will resume knocking on the door of R2 as it hasn’t even tested R1 at 2955 yet, and we suspect, this will depend on whether either of the other two have an agenda this trip.

Range:            2905  to  2955

Activity:          Good

Type:               On balance bearish

Nb. Our comment on 04/29/19

Well it has certainly been bit of a quiet start to the May expiry, although things could become far more interesting now the market is just below a test of R1.

The only change in the ratio above the zone is Y2 comes in ever so slightly.

Below the zone there are two changes, Y2 comes in to 2815 and R1 to 2775.

However, neither of these are significant enough to change the overall picture as there is still a sea of minimal Y ratio below the zone that stretches for 120-points.

Don’t forget, when you add in the zone itself and the Y ratio above it that is another 60-points.

So, the fact remains, this market remains very susceptible to any shocks, to the tune of almost 6%.

First things first, and a test of R1 at 2955 would go a long way to establishing what this market really thinks, as bumbling around in the Y ratio like it has been, doesn’t mean anything, well apart from a large degree of apathy.

Range:            2905  to  2955           

Activity:          Moderate         

Type:              On balance bearish            

Posted in Uncategorized

April 17th, 2019 by R1chard

Nb. Our comment from 04/12/19

Since our last comment on the 4th it has indeed been all about R2, which back then was at 2885 as you can see in the left-hand column in the above table.

Furthermore, exactly as we also said back then (please see above comment), this ratio was slipping, so if you had taken notice then all the price action in this index over the last week would have been perfectly understandable.

The top of the DJX’s zone was 26500, and their intraday high, and so far, expiry high, back on Friday 5th was 26487.

So, taking yesterdays close the DJX has lost 344-points, whereas, here in the SPX, it is down just 4.92-points.

As we said “it just keeps banging on that (R2) door” and we even mentioned 2995, so really you just can’t get better than that.

What we did get wrong however, was that the rollover and expiry wasn’t “next week” it is now next week.

But worth noting that R2 is now 2925, but there is what we call a step-up at 2905, which was R2 in-between publications.

The SPX has laid out its stall, and we believe it will still be sensitive to a still receding R2, so, for us, it all now boils down to the DJX, and the top of its zone, and the NDX.

The fact that the rollover and expiry are large on the horizon also means this market is still very susceptible to anyone saying “boo”.

Range:            2805  to  2885        or        2885  to  (2905) / 2925

Activity:          Poor

Type:               On balance bearish

Nb. Our comment on 04/17/19

Well it never really managed to become as courageous as it was, and therefore never really challenged R2 again.

In our last note R2 was at 2925, and as you can see today it has barely shifted, now residing at 2945.

Nevertheless, in the intervening period, the highest this market has got was intraday and 2916.06.

But, although R2 hasn’t moved much, the really significant move has been the huge expansion of the Y ratio bandwidth, which now stretches all the way up to 2930.

The fact the ratios have hardly filled in underneath, means this is more by default, or by a distinct lack of interest either way really.

The end result, is that the zone could easily flip to anywhere in the Y1 ratio bandwidth, and probably even Y2, the ratios are receding so fast.

Our money is on it shifting to 2895-2905, as back at the start of this expiry this was R2, nudging on R3, so that is a precipitous fall in the ratio down to Y1.

Admittedly, this index has been knocking on the R2 door, each time forcing it higher, but it hasn’t really filled in underneath, and leaving the zone to move right at the end is more about curve-fitting than rampant bullishness.

So, this index is still very scarily susceptible to anything going “boo”, but in the absence of such it is in default mode, trudging higher without any conviction that we can discern. In fact, quite the opposite.

Range:           2805  to  2930

Activity:         Moderate

Type:              On balance bearish

Posted in Uncategorized

April 15th, 2019 by R1chard

Nb. Our comment from 04/09/19

And we were not wrong as 7250 dominated this index for that week, until Friday 29th when it managed to hold on for that all important close above it, at 7279.17.

The trouble is that when we last commented on the FTSE, an entire 10 trading days ago, the ratio landscape has transformed.

There is absolutely no point in guessing when, so we are just going to fast-forward to the end of the next week, Friday the 5th April, when the close was 7446.87.

More importantly, the intraday high was 7461.39, so we strongly suspect that was this index’s first pop at R3.

However, we would be remiss not to point out how huge the changes have been, and in fact, so much so, they have virtually flipped 180 degrees from the 25th March.

Although there is now Y2 above the zone, what was there back on the 25th is now below the zone, which itself has leapt 200-points to 7150-7250.

But, the real clincher, is B1 has gone from above the old zone to now being below it, which signifies that the entire ratio alignment has totally adjusted.

No wonder it has managed to eventually achieve what it was threatening to in that very first week.

We would fully anticipate 7450 to slip to R2, leaving 7500 as the next resistance level.

If this is the case then the trading range should be 7400 to 7500.

Then, it will be all down to the rate of change in the ratios, especially as the clock is ticking and the expiry is now fast appearing on the horizon.

Range:            7400  to  7450        or        7450  to  7600

Activity:          Average

Type:              Bearish

Nb. Our comment on 04/15/19

Well when we made our trading range just 7400 to 7450, we thought the ratios would change sooner rather than later but it held out all week.

This made last week one of the quietest this year, with the net move on the week of just minus 14-points.

Despite 7450 getting battered all week it held, but as you can see R3 has now slipped to 7600, and our trading range is indeed now 7400 to 7500 just as anticipated.

However, the market is now out of time as we enter the rollover and expiry, which this week is on the very unusual Thursday.

This means 7400 is the really critical level, as below it is now all just Y1.

The good news is, as the ratios have fallen so far, that the zone is very likely to move up again.

But, even so, the market is still way ahead of where the zone may end up, so it’s going to be an interesting week for sure.

Range:          7400  to  7500

Activity:        Moderate

Type:            Bearish

Posted in Uncategorized

April 12th, 2019 by R1chard

Nb. Comment from 04/04/19 (Not published on-line)

To be honest the upper boundary of the zone when we last published was appallingly thin even for the minimal Y1.

In fact, so much so, in hindsight, we probably should have made the zone 25000 all the way up to 26500.

The gap up at the open on Monday of 147-points to 26075 made all this irrelevant anyway.

As far as we are concerned 26500 will be the all-important encounter, and if, or when, this happens and the DJX’s reaction, will tell you all you need to know about the remaining week of this expiry.

The fact that we have had just one 200-point and one 300-point daily move since the 28th is the bizarre aspect, as with zero ratio, these types of move should be the starting point.

Again, whether it is in one direction, or there and back, is neither here or there, it just should be a lot more volatile than it actually is.

The potential is certainly there, and from the top of their zone to the bottom is an eye-watering 1000-points don’t forget.

Range:      25500  to  26500           

Activity:    Moderate     

Type:         Neutral

Nb. Comment on 04/12/19

The day after our last comment the DJX hit the intraday high, and so far, expiry high, of 26487, or to us the top of its zone.

It is worth noting that up to yesterday’s close, 26143, this index has lost 344-points.

Apart from this being the top of our trading range, it is also significant because the SPX in that time has only retreated 4.92-points while the NDX has actually advanced 12.99-points.

Furthermore, what we said back on the 4th is just as relevant today, and really this index should be seeing 200-point daily moves as a matter of course.

Unlike the SPX, here there have been no changes to the ratios, so this makes 26500 still a very significant level.

What we always say is please look at all three US indices, as when one hits one of its significant ratio levels it will naturally be affected, but this is magnified when two or all three hit their own levels at the same time.

Range:           25500  to  26500   

Activity:         Poor

Type:              Bullish

Posted in Uncategorized

April 12th, 2019 by R1chard

Nb. Comment from 03/29/19

Again, we wish the table above for the NDX had been published back on the 20th, as just like the SPX and the DJX there were significant ratio levels that had to be contended with.

For the NDX it was right from the very start, as on that very first day this index closed right on Y2 at 7325.

And 7325 has been the constant theme for the past two weeks, and if you knew it was where Y2 was, and hence all that futures activity, then the last two weeks would have made a lot more sense.

Monday 18th the close was 7326.28, next day’s intraday low was 7321.93 having opened nearer 7360.

Wednesday’s intraday low was another test, being 7318.42, then it tried to break free, but as you can see the ratios were just not shifting, so by Friday it was back to Y2 with the close at 7326.06.

Of course, that was the day it dumped 167.21-points, so it probably would have been nice to know, that just like London, it was an accident waiting to happen.

Although, having fought through the hard yards, it is worth pointing out, and please see our previous commentary on this subject, that the Thursday immediately before this big dump, the DJX was hitting the top of their zone, intraday high 26009, and the SPX was meddling with R2, with their intraday high of 2860.31.

This week, 7325, has been significantly involved as well, suffice it to say Monday’s close was 7316.96 and yesterday’s 7320.47.

Nevertheless, at the end of the day, here we are at the midpoint of this expiry, which incidentally, closes a day early, and the ratios are still seriously underdeveloped.

So, just like the DJX, if this index gets a head of steam up, which is very possible in the run up to the rollover and expiry, it really could motor.

However, with R1 lurking up at 7600, and Y2 now in-between, it will find life a lot easier going south than it will north, but the bulls have already set out their stall, getting it as high as 7505.41, so they will have to be taken out first, and with the lack of ratio meaning a general lack of interest, that may not be so easy in itself.

Range:            7225  to  7325        or        7325  to  7600

Activity:          Moderate

Type:              Bearish

Nb. Comment on 04/12/19

The bulls had indeed set out their stall and yes, indeed, they did get a “head of steam up”.

Actually, and on the very day we published last, as you can see the previous close was 7320.47 from the left-hand column in the table above, but that Friday the market gapped up at the open to 7377.77.

But the real defining moment was when it came back down to Y2, with the intraday low of 7333.17, and the fact it bounced off Y2 meant the bulls really were back in the saddle.

Of course, we don’t know exactly when R1 slipped from 7600, but we suspect it was only recently as the intraday highs from the 3rd all the way through to Tue 9th of 7589.69, 7571.13, 7581.90, 7602.08 and 7596.75 suggest it didn’t give way until Wednesday.

All very punchy, but what we said above, back on the 29th March, is just as relevant today; “and the ratios are still seriously underdeveloped….. and with the lack of ratio meaning a general lack of interest, that may not be so easy in itself”.

The only difference this time round is that next week it is the rollover and the expiry, so time is very short indeed, and as it’s a long weekend quite a few will probably get going early.

At the end of the day, there is still so little ratio about the zone will move northwards no doubt, and substantially so, but nevertheless this index should be seeking the Y1 ratio bandwidth, at least, by the rollover.

Range:            7475  to  7725                    

Activity:          Poor

Type:              On balance bearish   

Posted in Uncategorized

April 12th, 2019 by R1chard

Nb. Our comment from 04/04/19

The SPX is still all about R2.

At the start of this week the intraday high on Monday was 2869.40, so we suspect the hitherto unchanged R2 was still at 2865.

However, that day the market closed at 2867.19, which is a fairly blatant sign that either the market had breached R2, or, and more likely, that it had slipped.

Today, it is at 2885, and as yesterday’s intraday high was 2885.25, it’s a fair assumption that it was here then.

Obviously, it is slipping, and this index just keeps banging on that door until it opens and move back to the next line of resistance.

It will probably hold in the morning, but we would be rather more circumspect later on.

2895 is the next R2 line of resistance, but 2905 is where it takes a big step-up.

But, don’t forget, next week is the rollover and expiry AND it is a 4-day week.

And, more importantly, the zone is still way down at 2795-2805, and is sandwiched in a sea of Y ratio, so if someone says “boo” to this market, there is no support underneath for a very long way indeed.

However, as always, best to keep an eye on the DJX as they seem to be the ones happy to force the pace.

Range:            2860  to  2885

Activity:          Poor

Type:               On balance just bearish

Nb. Our comment on 12/04/19

Since our last comment on the 4th it has indeed been all about R2, which back then was at 2885 as you can see in the left-hand column in the above table.

Furthermore, exactly as we also said back then (please see above comment), this ratio was slipping, so if you had taken notice then all the price action in this index over the last week would have been perfectly understandable.

The top of the DJX’s zone was 26500, and their intraday high, and so far, expiry high, back on Friday 5th was 26487.

So, taking yesterdays close the DJX has lost 344-points, whereas, here in the SPX, it is down just 4.92-points.

As we said “it just keeps banging on that (R2) door” and we even mentioned 2995, so really you just can’t get better than that.

What we did get wrong however, was that the rollover and expiry wasn’t “next week” it is now next week.

But worth noting that R2 is now 2925, but there is what we call a step-up at 2905, which was R2 in-between publications.

The SPX has laid out its stall, and we believe it will still be sensitive to a still receding R2, so, for us, it all now boils down to the DJX, and the top of its zone, and the NDX.

The fact that the rollover and expiry are large on the horizon also means this market is still very susceptible to anyone saying “boo”.

Range:           2805  to  2885        or        2885  to  (2905) / 2925

Activity:         Poor

Type:              On balance bearish

Posted in Uncategorized