Category: Uncategorized

February 26th, 2020 by R1chard

 

Nb. Our comment from the 02/21/20

March expiry not published.

 

Nb. Our comment on 02/26/20

 

We made a point out of saying the FTSE had been zone bound for the entire Feb expiry, even when it was knocking on the upper boundary at 7650 at the very start.

Of course, the March expiry on the 21st was not published, but as you can see the zone was 7200 to 7300.

So, the FTSE did remarkable well to expire in its zone on Friday, the EDSP was 7417.38 out of interest, but March was again different.

So, the zone at the start of Feb was 7550-7650, and it moved to 7400-7500, and now you have March kicking off at 7200-7300.

The fact that Monday closed at 7156.83, meant it had already overshot, and, therefore, was in trouble.

There is a step-up in the ratio at 6950, hence why it is in brackets in our range.

Also, the top is where B1 starts, so could provide some resistance.

However, we would anticipate this being rather minimal, as given half a chance, this market should erupt out of from being in the B ratios, like a scalded cat.

If it doesn’t make it soon, it means this trip is going to be one very hard slog through this level of ratio.

Exciting times.

 

Range:            (6950)  to  7050         

Activity:          Poor

Type:              On balance bearish  

Posted in Uncategorized

February 25th, 2020 by R1chard

Nb. Our comment from 02/20/20

Not published for the March expiry.

 

 

Nb. Our comment on 02/25/20

Well, really, you should not have been surprised by this move, or the timing of it, being at the dawn of a new expiry.

If anything, it has been a result, as the Y ratio bandwidth we have been incessantly banging on about, has actually narrowed in March, to 190-points, from the 260-points in the previous trip.

Worth noting is that the intraday high last week, and actually the expiry high, was on Wednesday 19th at 3393.52, but if you look back, 3385 would be the more frequent intraday high.

The point being, that from 3385 to yesterday’s intraday low of 3214, is 171-points.

You can quibble about 19-points, but that’s close enough for us.

The ratio table above is the pertinent point now, as R1 is not that far away, which will be the big test for the bears.

As will the fact that today this index is in bear territory (below the zone), which it didn’t like last trip.

For us, that move proves nothing, as it is just through the minimal Y ratio.

Dramatic it may be, but it is only what we would expect.

The real fun comes when it starts taking on the R ratios, either side of the zone, naturally.

 

Range:            3195  to  3270         

Activity:          Average      

Type:              On balance only just bearish

Posted in Uncategorized

February 21st, 2020 by R1chard

Nb. Our comment from the 02/13/20

 

It has been probably a bit too long since our last comment, especially as there have been so many changes to the ratios.

The real biggie, is the fall in the zone to 7400-7500 of course.

We didn’t see that coming, although without calculating the ratios there is naturally no way that we could have.

More importantly, without knowing when that, or the other ratios changed, means we can’t really comment on any market interaction.

However, the last two days activity around 7500, the top of the zone, now makes sense.

There are going to be a lot more twists and turns here for sure, especially as the rollover is upon us next week.

Suffice it to say, that with the Y ratio bandwidth now stretching from 7250 all the way up to 7650, the FTSE has ample latitude to do almost anything.

The only perplexing aspect is why it isn’t putting down moves like the DAX.

One point that is worth remembering, is that over the first three days of this expiry, this index couldn’t break up through what was then the top of its zone, or 7650, which, as you can see is now R1.

Which is also the top of our range.

 

Range:            7500  to  7650         

Activity:          Moderate

Type:              On balance decently bullish  

 

 

Nb. Our comment on 02/21/20

 

As we said in our last comment; “The real biggie, is the fall in the zone to 7400-7500 of course”.

Furthermore, we also pointed out; “However, the last two days activity around 7500, the top of the zone, now makes sense”.

The point of repeating this is the fact on the very day of our last comment, this market’s intraday high and low were 7534.37 and 7406.94, before closing at 7452.03, right bang slap in the middle of the zone.

The next two days saw intraday lows of 7403.69 and 7409.13, two more test of the bottom boundary.

So, no surprise day three closed below it, Tuesday 18th, but respect for the recovery the next day, to close at a rather coincidental 7457.02, middle stump again.

It will be rather interesting to see if it can hold its zone for the actual expiry today, but the last hour or so is rather academic, especially as the triple witching March is overshadowing everything.

Our reading of the Feb expiry is that the FTSE has been zone bound throughout, initially getting knocked back when the upper boundary was 7650 at the very start, then since its moved to its current level, it has been there or thereabouts.

The only shame being that we weren’t watching to see when it did make the actual move.

Basically, bit of a lucky escape really, as the ratios have weakened below the zone, with the appearance of Y1, so it could have been an awful lot worse, if you’re a bull that is.

 

Range:            7400  to  7500         

Activity:          Moderate

Type:              On balance decently bearish  

Posted in Uncategorized

February 20th, 2020 by R1chard

Nb. Our comment from 02/11/20

 

It is probably difficult to remember back to last Tuesday the 4th February, but that was the day of our last comment, which happened to coincide with the rather large fiscal stimulus made by the Chinese government.

The end result was an opening gap up of about 32-points, which more importantly, took the open to 3280.61, which was above R1, then at 3280.

That left R2 as the last remaining resistance, and (yet) another opening gap up, this time a more moderate 29-points, got the market safely above that by starting the day off at 3324.91.

Essentially the situation hasn’t changed, as the Y ratio bandwidth is pretty much the same, it’s just that it too is moving up with the market.

In US Football they call it moving the chain, making it first down again with ten yards to go.

The only issue here is that the chasm of very minimal ratio remains beneath this market.

Albeit, the zone has moved up, but as we explained previously, moving up into a level of minimal ratio is not the hardest task to achieve, and is almost self-fulfilling if the underlying is so far ahead in the distance as well.

One difference that perhaps may be worth considering, is that after recent events the bulls may not be as resilient as they once were?

Great it’s moving up, great the zone is as well, and great the ratios are reacting, but really not so great is the Y ratio bandwidth hasn’t shrunk and that the rollover starts next week.

Don’t get fooled, the risks are still there, and perhaps the bulls resolve might not be what it once was.

 

Range:            3255  to  3355         

Activity:          Moderate      

Type:              On balance only just bearish

 

 

Nb. Our comment on 02/20/20

 

To be fair it has been bit of a default expiry for the February one.

By which we mean that equities have definitely been in control, and the ratios have adapted around them.

Although, to be fair it hasn’t exactly got the pulses racing, as back at the very start of this trip, the market was 3329.62, so a rise of 56.53-points, or 1.70%, so far over 5-weeks is not that spectacular.

However, dropping back to 3214.68, virtually the top of the then zone, made it a very decent round trip.

The zone has continued upwards, and, no doubt, there is probably one move left in it even at this late stage, but as we said, migrating into Y1 ratio is not the hardest thing and “almost self-fulfilling”.

For us the real yardstick, has been the overall depth of the Y ratio bandwidth, which has remained staggeringly wide throughout.

It started at 245-points, then 210, 210, 220 until now it is 260-points.

So, our analogy still stands, with this bandwidth representing the 10-yards in US football, and all this market has done is move this chain forward.

The risk remains, which is an 8% in-the-blink-of-an-eye type risk.

Great it dodged a bullet, but best not to get complacent.

Tomorrow is expiry, so it looks like this expiry is done, but next up is the first triple of this year, and it shouldn’t be so accommodating.

 

Range:            3330  to  3430         

Activity:          Good      

Type:              On balance bearish

Posted in Uncategorized

February 13th, 2020 by R1chard

Nb. Our comment from the 01/31/20

 

It seems like the bears had one more battle, as on the very day of our last comment, the FTSE catapulted itself back into its zone, which to us means above 7550.

The official open was 7507.67, the previous days auction close, so not even the real time one, but to market practitioners, what we shall call, the tradable open, was more like 7564.

Madness really.

Same story really, just in reverse (as in the tradable open being below 7550), on the Monday, the day it closed down 173.93-points.

The Tuesday saw the FTSE test R1 at 7450 first thing, got a bloody nose, but felt confident enough to go back and camp out there for 90 minutes, before a benign Street helped it enough to get above it.

Wednesday, was also all about 7450, but this time it was acting as support.

Yesterday, we were back to the official open bearing no resemblance to the tradable one, but suffice it to say 7450 didn’t even get a look-in.

Today, we can see quite a few changes in the ratios, and very significantly, there is a lot more Y ratio about now.

Interestingly 7350 hasn’t changed, so is now also a very significant level.

But the real deciding factor may now well be R1 having now shifted from 7450 to 7400.

This is because the intraday low on Thursday was 7357.62, and that was at the end of a 126-point fall, we have no doubt or hesitation in calling that a test of R2.

If R2 can hold, and now R1 is not that far away, it could easily get back int the Y ratio.

Either way, it is now in a very narrow bandwidth, so it will have to decide one way or the other soon.

 

Range:            7350  to  7400         

Activity:          Average

Type:              Bearish  

 

     

 Nb. Our comment on 02/13/20

 

It has been probably a bit too long since our last comment, especially as there have been so many changes to the ratios.

The real biggie, is the fall in the zone to 7400-7500 of course.

We didn’t see that coming, although without calculating the ratios there is naturally no way that we could have.

More importantly, without knowing when that, or the other ratios changed, means we can’t really comment on any market interaction.

However, the last two days activity around 7500, the top of the zone, now makes sense.

There are going to be a lot more twists and turns here for sure, especially as the rollover is upon us next week.

Suffice it to say, that with the Y ratio bandwidth now stretching from 7250 all the way up to 7650, the FTSE has ample latitude to do almost anything.

The only perplexing aspect is why it isn’t putting down moves like the DAX.

One point that is worth remembering, is that over the first three days of this expiry, this index couldn’t break up through what was then the top of its zone, or 7650, which, as you can see is now R1.

Which is also the top of our range.

 

Range:            7500  to  7650         

Activity:          Moderate

Type:              On balance decently bullish  

Posted in Uncategorized

February 11th, 2020 by R1chard

Nb. Our comment from 02/04/20

 

The writing was on the wall when the intraday high on the day of our last comment was 3293.47, and, more importantly, the close was below R1 at 3290.

Very interestingly, today, R1 has moved back to 3280, so definitely a level to watch.

However, hopefully you have not been too disappointed with the level of volatility, as you should have been expecting it.

Although a 43.11-point whipsaw on Thursday 30th was quite extreme.

Our only disappointment is that, so far at least, the expiry low is 3214.68, so less than 10-points away from the zone.

This is however tempered by the fact it is just 9.68-points, hardly anything on a three-thousand-point index, and, especially so, after a fall of 123.09-points.

Furthermore, as we have continuously pointed out, that there is still a stupid amount of Y ratio around, and even Y1 ratio, so there is actually a case for arguing the zone itself could be 3150 all the way up to 3230.

With just over two and a half weeks still to go this trip, there is still plenty of life left in the Feb expiry.

And, although, it is good to see the ratios building below the zone, they have also done so above it, so both bullish and bearish.

But, at the end of the day, there is still just over 200-points of Y ratio bandwidth, which is colossal.

So, for us at least, volatility is still the name of the game, as is the risk, as please don’t forget the corresponding R ratios below the zone don’t kick in until 3070, so the main course could still be to come.

 

Range:            3205  to  3280         

Activity:          Moderate      

Type:              On balance bearish

 

 

Nb. Our comment on 02/11/20

 

It is probably difficult to remember back to last Tuesday the 4th February, but that was the day of our last comment, which happened to coincide with the rather large fiscal stimulus made by the Chinese government.

The end result was an opening gap up of about 32-points, which more importantly, took the open to 3280.61, which was above R1, then at 3280.

That left R2 as the last remaining resistance, and (yet) another opening gap up, this time a more moderate 29-points, got the market safely above that by starting the day off at 3324.91.

Essentially the situation hasn’t changed, as the Y ratio bandwidth is pretty much the same, its just the that it too is moving up with the market.

In US Football they call it moving the chain, making it first down again with ten yards to go.

The only issue here is that the chasm of very minimal ratio remains beneath this market.

Albeit, the zone has moved up, but as we explained previously, moving up into a level of minimal ratio is not the hardest task to achieve, and is almost self-fulfilling if the underlying is so far ahead in the distance as well.

One difference that perhaps may be worth considering, is that after recent events the bulls may not be as resilient as they once were?

Great its moving up, great the zone is as well, and great the ratios are reacting, but really not so great is the Y ratio bandwidth hasn’t shrunk and that the rollover starts next week.

Don’t get fooled, the risk are still there, and perhaps the bulls resolve might not be what it once was.

 

Range:            3255  to  3355         

Activity:          Moderate      

Type:              On balance only just bearish

Posted in Uncategorized

February 4th, 2020 by R1chard

Nb. Our comment from 01/29/20

 

As we said in our last comment, please do not read anything into the zone move, this is not because of directional forces, but rather because it is so ridiculously thin out there.

Anyway, it is just back to where it started.

The really important ratio to watch is R1 below the zone, which has risen 25-points to 3045.

Pathetic, in a word, even more so considering how far and how fast the market has fallen.

Doubly so, when one factors in the fact the “type” of activity is bearish, which, to us, means an awful lot more puts traded than calls.

In fact, our Delta Ratio level is standing at just 40.7%, which is very bullish, but, under these conditions, not so much, because of where the market is already, and the colossal amount of Y ratio around.

Admittedly, R1 above the zone has conceded some ground, but the enormous risk is still the 245-points on minimal Y ratio bandwidth.

R1 above the zone was 3280, so, for us at least, it was no coincidence that yesterday the SPX spent a lot of time trying to break back up through it.

For the record the intraday high was 3285.78 yesterday.

Obviously, 3290 is now a critical level, as above it is back into the R1 ratio bandwidth.

If it remains below it, the next support level is the nomadic zone.

But, more to the point, if this index remains in the Y ratio bandwidth then the recent volatility will soon appear as if it was just the hors d’oeuvres.

 

Range:            3205  to  3290         

Activity:          Average      

Type:              On balance bearish

 

 

Nb. Our comment on 02/04/20

 

The writing was on the wall when the intraday high on the day of our last comment was 3293.47, and, more importantly, the close was below R1 at 3290.

Very interestingly, today, R1 has moved back to 3280, so definitely a level to watch.

However, hopefully you have not been too disappointed with the level of volatility, as you should have been expecting it.

Although a 43.11-point whipsaw on Thursday 30th was quite extreme.

Our only disappointment is that, so far at least, the expiry low is 3214.68, so less than 10-points away from the zone.

This is however tempered by the fact it is just 9.68-points, hardly anything on a three-thousand-point index, and, especially so, after a fall of 123.09-points.

Furthermore, as we have continuously pointed out, that there is still a stupid amount of Y ratio around, and even Y1 ratio, so there is actually a case for arguing the zone itself could be 3150 all the way up to 3230.

With just over two and a half weeks still to go this trip, there is still plenty of life left in the Feb expiry.

And, although, it is good to see the ratios building below the zone, they have also done so above it, so both bullish and bearish.

But, at the end of the day, there is still just over 200-points of Y ratio bandwidth, which is colossal.

So, for us at least, volatility is still the name of the game, as is the risk, as please don’t forget the corresponding R ratios below the zone don’t kick in until 3070, so the main course could still be to come.

 

Range:            3205  to  3280         

Activity:          Moderate      

Type:              On balance bearish

Posted in Uncategorized

January 31st, 2020 by R1chard

Nb. Our comment from the 01/24/20

 

“So, 7550 remains “a massive level””, was our mantra from the Jan expiry, and guess what, it’s the same for the Feb one.

It is a terrible shame we didn’t publish on the 20th, as all the action in the FTSE so far this week would have made perfect sense.

Monday saw the intraday high of 7682.77, but ultimately the market closed right on their zone’s upper boundary after this test, at 7651.44.

We do bang on about the auction, but the real time close on the 20th was 7649.90, so, for us, that is a close exactly on the boundary, but still inside by a whisker.

Tuesday saw an intraday high of 7651.44 and an intraday low of 7550.47, which was not only a bandwidth test, but a zone bandwidth test.

Normally, these signal a breakout the next day.

However, the FTSE was too timid, or uncertain, and traded inside its zone with no further boundary tests, with the intraday high of 7637.35 and low of 7563.52.

Regardless of this indecision, a breakout was still the signal, which obviously came yesterday, with a bit of a nudge from the Street.

You can see the ratio levels in the table above, so no need to repeat them here, but it is perhaps worth reminding, that below the zone means the market is in bearish territory.

Which, to put it another way, means the bears are in control.

 

Range:            7450  to  7550         

Activity:          Strong

Type:              On balance just fractionally bullish 

 

 Nb. Our comment on 01/31/20

 

It seems like the bears had one more battle, as on the very day of our last comment, the FTSE catapulted itself back into its zone, which to us means above 7550.

The official open was 7507.67, the previous days auction close, so not even the real time one, but to market practitioners, what we shall call, the tradable open, was more like 7564.

Madness really.

Same story really, just in reverse (as in the tradable open being below 7550), on the Monday, the day it closed down 173.93-points.

The Tuesday saw the FTSE test R1 at 7450 first thing, got a bloody nose, but felt confident enough to go back and camp out there for 90 minutes, before a benign Street helped it enough to get above it.

Wednesday, was also all about 7450, but this time it was acting as support.

Yesterday, we were back to the official open bearing no resemblance to the tradable one, but suffice it to say 7450 didn’t even get a look-in.

Today, we can see quite a few changes in the ratios, and very significantly, there is a lot more Y ratio about now.

Interestingly 7350 hasn’t changed, so is now also a very significant level.

But the real deciding factor may now well be R1 having now shifted from 7450 to 7400.

This is because the intraday low on Thursday was 7357.62, and that was at the end of a 126-point fall, we have no doubt or hesitation in calling that a test of R2.

If R2 can hold, and now R1 is not that far away, it could easily get back int the Y ratio.

Either way, it is now in a very narrow bandwidth, so it will have to decide one way or the other soon.

 

Range:            7350  to  7400         

Activity:          Average

Type:              Bearish  

Posted in Uncategorized

January 29th, 2020 by R1chard

Nb. Our comment from 01/23/20

 

Well if we thought the Jan expiry was thin, then this Feb one has got even thinner.

In fact, it’s virtually opaque.

Please don’t read too much into the fact the zone has moved down to 3145-3155, as rather than being a bullish or bearish signal (down is bearish btw), this movement is really as a result of it being so thin.

Or, to put it another way, devoid of any ratio.

More significant, is the fact that R1 below the zone has not moved at all, which is highly unusual in the first week of a new expiry.

Furthermore, above the zone, R1 has moved in, but only by 20-points, which is nothing considering.

Another very unusual fact, is this expiry is the first of two back-to-back 5-week expiries. One is unusual enough, but we would need a historian to tell us the last time we got two together.

At the end of the day, the really important factor is the immense amount of Y Ratio present, a staggering 260-point bandwidth worth.

So, same as last expiry, it may not happen, but don’t be complacent as the risk of a massive move is there.

In fact, the risk is heightened, and 3% moves are extremely possible, which in cold numbers, is 100-points, so be very aware.

Obviously 3320 and 3280 are the crucial levels.

 

Range:            3320  to  ….          

Activity:          Good      

Type:              On balance bearish

 

Nb. Our comment on 01/29/20

 

As we said in our last comment, please do not read anything into the zone move, this is not because of directional forces, but rather because it is so ridiculously thin out there.

Anyway, it is just back to where it started.

The really important ratio to watch is R1 below the zone, which has risen 25-points to 3045.

Pathetic, in a word, even more so considering how far and how fast the market has fallen.

Doubly so, when one factors in the fact the “type” of activity is bearish, which, to us, means an awful lot more puts traded than calls.

In fact, our Delta Ratio level is standing at just 40.7%, which is very bullish, but, under these conditions, not so much, because of where the market is already, and the colossal amount of Y ratio around.

Admittedly, R1 above the zone has conceded some ground, but the enormous risk is still the 245-points on minimal Y ratio bandwidth.

R1 above the zone was 3280, so, for us at least, it was no coincidence that yesterday the SPX spent a lot of time trying to break back up through it.

For the record the intraday high was 3285.78 yesterday.

Obviously, 3290 is now a critical level, as above it is back into the R1 ratio bandwidth.

If it remains below it, the next support level is the nomadic zone.

But, more to the point, if this index remains in the Y ratio bandwidth then the recent volatility will soon appear as if it was just the hors d’oeuvres.

 

Range:            3205  to  3290          

Activity:          Average      

Type:              On balance bearish

Posted in Uncategorized

January 24th, 2020 by R1chard

Nb. Our comment from the 01/20/20 (Not published)

 

Nb. Our comment on 01/24/20

 

“So, 7550 remains “a massive level””, was our mantra from the Jan expiry, and guess what, it’s the same for the Feb one.

It is a terrible shame we didn’t publish on the 20th, as all the action in the FTSE so far this week would have made perfect sense.

Monday saw the intraday high of 7682.77, but ultimately the market closed right on their zone’s upper boundary after this test, at 7651.44.

We do bang on about the auction, but the real time close on the 20th was 7649.90, so, for us, that is a close exactly on the boundary, but still inside by a whisker.

Tuesday saw an intraday high of 7651.44 and an intraday low of 7550.47, which was not only a bandwidth test, but a zone bandwidth test.

Normally, these signal a breakout the next day.

However, the FTSE was too timid, or uncertain, and traded inside its zone with no further boundary tests, with the intraday high of 7637.35 and low of 7563.52.

Regardless of this indecision, a breakout was still the signal, which obviously came yesterday, with a bit of a nudge from the Street.

You can see the ratio levels in the table above, so no need to repeat them here, but it is perhaps worth reminding, that below the zone means the market is in bearish territory.

Which, to put it another way, means the bears are in control.

 

Range:            7450  to  7550         

Activity:          Strong

Type:              On balance just fractionally bullish 

Posted in Uncategorized