Category: Uncategorized

September 23rd, 2020 by R1chard

Will R2 be enough to help the FTSE bulls.

 

Nb. Our comment from the 09/18/20 (Not published)

 

Nb. Our comment on 09/23/20

 

Well, don’t we feel a bit silly for not calculating the ratios here on Monday or Tuesday.

Obviously, there have been big changes since we last looked at them on Friday, the day the September expiry ended.

Of course, there has been a lot of activity, and where we have “very good”, it is worth mentioning that this is just a smidgen below the threshold of “strong”.

But the main reason we are a bit aggrieved, is we don’t know when the zone changed, or when R2 moved from 5850 to 5800, and now we never will.

Both rather pertinent so far this week, needless to say.

May not see it, but what we have noticed, is R3 at 5750 has been steady, and more than that, while R2 has obviously been slipping, this level has actually strengthened.

In fact, because of this divergence, 5800 is in clear danger of dropping to R1, which would make the jump up to R3 at 5750, all the more impactful.

If 5800 was R2 yesterday, and therefore because the intraday low was 5794.54, then the markets reaction to this, means that it should be even more pronounced when, or if, it encounters the dynamic hedge futures buying at R3.

Otherwise there is not else to say, as it looks a perfectly normal ratio table now, balanced, with the zone not far away, all aided and abetted by some decent levels of activity.  

 

Range:            5800  to  5900        

Activity:          Very good

Type:              Neutral

 

 

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Posted in Uncategorized

September 22nd, 2020 by R1chard

The SPX Oct expiry still has a huge Y ratio bandwidth.

 

Nb. Our comment from the 09/18/20 for the Sept Expiry

 

Well it is humble pie time for us, and really, we should know better than to assume something is going to happen before it actually does.

We are, of course, referring to the fact we just assumed the zone was going to revert back to 3395-3405.

Evidently, it hasn’t.

In our defence, all the signs we there, and if it wasn’t literally the last few hours of the expiry, we believe we would have been correct.

What is impressive though, is the strength in the ratios, both above and below the zone, in these final hours, and, sorry, there is no way anyone can foresee that amount of activity suddenly manifesting itself.

For the record, the settlement price for the Sept SPX was 3353.60.

We haven’t produced a table for the October expiry, but while we are here, this is a good opportunity to let you know how it stands at the moment.

This is a snapshot of how it is, before it becomes the front month, so please bear this in mind, as it means it is not quite fully developed.

Furthermore, we are returning to an intermediary expiry, from a triple, so, if history is anything to go by, everything scales down very significantly, and, therefore, sensitivity should increase.

The zone is the same as September’s.

Ironically, 3395-3405 as the potential new zone is quite probable.

But R1 below the zone, does not kick-in until 3070, whereas above it, until 3580.

Obviously, we expect these to change significantly by next week, but as it stands, we are back to a 510-point Y ratio bandwidth.

So, if you are hoping for a quiet market, then, on this evidence, we suspect you will be disappointed.

 

 

Range:            3355  to  3405         

Activity:          Good

Type:              On balance bearish

 

 

 

Nb. Our comment for 09/22/20

 

We do not normally add our last comment of the previous expiry to the new one, but as we did comment, last Friday, on how things stood in October, we couldn’t help but blow our own trumpet.

Two things; Firstly, the zone back then, and on Monday, was 3345-3355, which is significant.

As, and secondly, when the market expired at 3353.60, right in its zone, all was well and good, but, the second it went below this zone the first warning bell should have been sounding.

And, when it closed at 3319.47, below the zone, and therefore in bear territory, it should have been more of a siren than a bell.

Volatility and whipsaw, right from the off, and only to be expected with so much of the minimal Y ratio present.

Which also ties in with the drop today in the zone, and, although not published, this is actually where the October zone in September was.

It only recently moved up to join September’s, almost certainly due to the rollover and expiry, so it has hardly had any time at all to cement this move.

Furthermore, with so much of the minimal Y1 ratio around, the zone could almost be anywhere from 3300 all the way up to 3400.

So, rather surprisingly, the fact that the SPX has recovered, and is looking to hover around its zone, is actually a good thing, despite yesterday’s 90-point move.

Although we appreciate you can’t tell from the table above, but, although the zone flipped back, Y2 and R1 either side of the zone, at either zone level, are static.

As is R2 below it, but R2 above has actually come in a bit.

Overall, though, the Y ratio bandwidth may have improved to 460-points from 510 on Friday, but this still represents 14%, so don’t go getting complacent just because the first couple of days are gravitating near the zone, as this expiry is probably only just getting going.

 

 

Range:            3095  to  3295         

Activity:          Moderate

Type:              On balance only just bearish

 

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Posted in Uncategorized

September 18th, 2020 by R1chard

Humble pie time, as the SPX's zone didn't change, which also means an expiry bullseye though.

 

Nb. Our comment from the 09/16/20

 

As today is the rollover, therefore the expiry is this Friday, please don’t get hung-up on the fact the zone has reverted to 3345-3355.

There is a time lag in the movement of the zone, which is essentially why we have Y1 and Y2 ratio levels, which we constantly refer to as minimal.

The overriding point therefore of these minimal levels is to indicate, as early as possible, the rate of change, and therefore the potential next move.

The trouble is, that in a triple, the direction may be obvious, but it just may take a bit of time for that amount of activity to actually facilitate the move.

So, for this expiry, the move was signalled way back when, but when it did eventually move, the SPX had turned around and was mid process of losing 247.14-points.

So, no wonder it thought twice, and reverted, but, again in the meantime, 3395-3405, looks like the target.

And anyway, the old bottom boundary, 3345, did its job, as one could easily see its influence on the market at the tail end of last week, and we for one, are not overly surprised that the market bounced from this region.

The other point to make, is in our last FTSE note, we pointed out that this index losing 247 while the FTSE rose 233, realigned the markets and their ratios, putting both about 2% below their respective zones heading into the final week, so it was fascinating how each has gone about achieving a similar aim from a similar starting line.

Needless to say, and rather in keeping, the SPX raced ahead, achieving it essentially in one day, whereas the FTSE, is still struggling, and being very pedantic.

Now it will be all about trying to take the steam out of the market, as we often liken this amount of Y ratio to an ice-rink (very little impetus goes a very long way), so to end in its zone is similar to a beginner trying to land a curling stone in the bullseye.

Nevertheless, it will be revealing how this market reacts to Y2, as it should reveal how committed the bulls actually, and, don’t forget, R1 is not that far above.

 

Range:            3355  to  3405         

Activity:          Poor

Type:              On balance bearish

 

 

 

Nb. Our comment for 09/18/20

 

Well it is humble pie time for us, and really, we should know better than to assume something is going to happen before it actually does.

We are, of course, referring to the fact we just assumed the zone was going to revert back to 3395-3405.

Evidently, it hasn’t.

In our defence, all the signs we there, and if it wasn’t literally the last few hours of the expiry, we believe we would have been correct.

What is impressive though, is the strength in the ratios, both above and below the zone, in these final hours, and, sorry, there is no way anyone can foresee that amount of activity suddenly manifesting itself.

For the record, the settlement price for the Sept SPX was 3353.60.

We haven’t produced a table for the October expiry, but while we are here, this is a good opportunity to let you know how it stands at the moment.

This is a snapshot of how it is, before it becomes the front month, so please bear this in mind, as it means it is not quite fully developed.

Furthermore, we are retuning to an intermediary expiry, from a triple, so, if history is anything to go by, everything scales down very significantly, and, therefore, sensitivity should increase.

The zone is the same as September’s.

Ironically, 3395-3405 as the potential new zone is quite probable.

But R1 below the zone, does not kick-in until 3070, whereas above it, until 3580.

Obviously, we expect these to change significantly by next week, but as it stands, we are back to a 510-point Y ratio bandwidth.

So, if you are hoping for a quiet market, then, on this evidence, we suspect you will be disappointed.

 

 

Range:            3355  to  3405         

Activity:          Good

Type:              On balance bearish

 

 

Available to buy now

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Posted in Uncategorized

September 16th, 2020 by R1chard

The SPX is where it should be for the rollover, but can it stay here?

 

Nb. Our comment from the 09/11/20

 

We really ran out of space, rather than omit, to tell you, back on the 9th, that the moves in the zone were likely far from over, and that 3395-3405, was looking bit of a shoe-in.

As with everything in hindsight, this was a mistake, as not only did the bulls put up a fight, this is exactly where the market rallied to.

But not only that, it changes the complexion of it all, especially in light of yesterday’s fall.

Of course, when it moved, it gave a strong signal, and target, to the bulls.

But, when the market failed to hold, it also gives a lot more credence to the bears, as if the zone was still at 3345-3355, then yesterday’s drop was just in keeping with where the natural market gravitational forces would direct it.

However, now comes the really difficult part, as both, or either, could still be the zone.

It will take a day or so, for one or the other, to cement its claim, and as it is rollover and expiry next week, we are plumb out of time.

The only way we can think of understanding/explaining this situation, at least for today, is to think of the zone going from 3345 all the way up to 3405.

Normally, this would be an amazing 60-points worth of zero ratio, astonishing in a triple really, but as markets are just so weird at present, we do not think that this will make that much difference, bizarrely.

In these brave new times, we still have a Y ratio bandwidth of 410-points, inside of which, the Y1 ratio bandwidth stretches for 260-points, so calling 60 of those zero, when they are already just above absolute minimum, will not make a great deal of difference we suspect.

Aside from this, worth noting is that below the zone the ratios (apart from R2 & R3) haven’t changed, but above, they have strengthened, which is a first for this expiry, and, therefore, very noteworthy.

The upshot is, that bears are in control, and flexing their muscles, but when it comes to next week, anywhere in this ridiculously massive Y ratio bandwidth, is absolutely fine, so big moves, whipsaw and volatility are the name of the game, enjoy.

 

Range:            3095  to  3395         

Activity:          Moderate

Type:              On balance only just bearish

 

 

Nb. Our comment for 09/16/20

 

As today is the rollover, therefore the expiry is this Friday, please don’t get hung-up on the fact the zone has reverted to 3345-3355.

There is a time lag in the movement of the zone, which is essentially why we have Y1 and Y2 ratio levels, which we constantly refer to as minimal.

The overriding point therefore of these minimal levels is to indicate, as early as possible, the rate of change, and therefore the potential next move.

The trouble is, that in a triple, the direction may be obvious, but it just may take a bit of time for that amount of activity to actually facilitate the move.

So, for this expiry, the move was signalled way back when, but when it did eventually move, the SPX had turned around and was mid process of losing 247.14-points.

So, no wonder it thought twice, and reverted, but, again in the meantime, 3395-3405, looks like the target.

And anyway, the old bottom boundary, 3345, did its job, as one could easily see its influence on the market at the tail end of last week, and we for one, are not overly surprised that the market bounced from this region.

The other point to make, is in our last FTSE note, we pointed out that this index losing 247 while the FTSE rose 233, realigned the markets and their ratios, putting both about 2% below their respective zones heading into the final week, so it was fascinating how each has gone about achieving a similar aim from a similar starting line.

Needless to say, and rather in keeping, the SPX raced ahead, achieving it essentially in one day, whereas the FTSE, is still struggling, and being very pedantic.

Now it will be all about trying to take the steam out of the market, as we often liken this amount of Y ratio to an ice-rink (very little impetus goes a very long way), so to end in its zone is similar to a beginner trying to land a curling stone in the bullseye.

Nevertheless, it will be revealing how this market reacts to Y2, as it should reveal how committed the bulls actually, and, don’t forget, R1 is not that far above.

 

Range:            3355  to  3405         

Activity:          Poor

Type:              On balance bearish

 

 

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Posted in Uncategorized

September 14th, 2020 by R1chard

With the FTSE gaining over 200-points while the US went South means Ratio imbalance now sorted.

 

Nb. Our comment from the 09/07/20

 

No bounce off 5950 this time, and it probably didn’t help the fact that London was closed on Monday 31st August.

As this meant it had to play catch-up to a what was a weak Europe and the US on that day, when they came back on the Tuesday.

But, DR at 5850, did put up a decent fight, as it should, as that is a more appropriate level for a triple.

And the first three days of last week were all about 5850 and DR, with the close on Tuesday an impressive recovery to end at 5862.05.

Wednesday saw a rally, but sadly ran into our old friend 5950, which did make that a bandwidth test.

And it did try on the Thursday, getting as high as 5996.24, but the fact it eventually closed at 5850.86, was as blatant a signal that you could get.

The fact it closed right on DR held out a glimmer of hope, otherwise why else would it, but the surrounding environment was not going to give it any assistance, especially with the Street being so weak, which was a problem we highlighted right at the very start of this expiry of course.

What we said back then was the SPX was above its zone, bumping into the R ratios, whereas the FTSE “was the polar opposite”, and no prizes for guessing which one won.

For the FTSE, it is now a very long way down to the next ratio level, but the bears are obviously struggling to cope with DR, and with two weeks to go, it won’t be long before the zone comes into play.

But it now has to get back up and over, not only DR but also R3 at 5950, to stand a chance by next week, so it’s certainly no given.

 

Range:            5550  to  5850        

Activity:          Very poor

Type:              On balance decently bearish

 

 

Nb. Our comment on 09/14/20

 

Hugely impressed with the FTSE last week, as despite the weak Street, it managed to gain the very impressive 233.01-points.

For the record, the SPX ended last week with a loss of 85.99-points.

But it has been much much more than that, as from the high, back in early Sept, when the SPX was struggling with its fight with R2 ratio, it has now given up 247.14-points.

So, when one considers what the FTSE has done in that context, it throws any correlation out of the window, and puts a lot of credence onto the ratios.

And yes, we don’t believe in coincidences, but as of now, both indices are now just below their respective zones, so both are now back in sync.

Let the correlation begin again.

One point of housekeeping, is that the intraday low on Thursday was 5950.62, so that is most definitely the first test of what is now R2, then possibly still R3, and so the bottom of its trading range.

Next week it should all be about the rollover and expiry, and don’t forget this is a triple.

Therefore, the focus should be all about getting back into its zone.

Of course, there is always the possibility of a spanner being thrown in, but as things stand, both the FTSE and the SPX, need to gain just 2% to reach their zones.

So, considering how extremely unbalanced they both were, they couldn’t have now put themselves in a better position than they have, even if they had planned it themselves.

 

Range:            5950  to  6150        

Activity:          Moderate

Type:              On balance bullish

 

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Posted in Uncategorized

September 11th, 2020 by R1chard

Fantastic battle raging in the SPX helped, or because of, all the Y Ratio.

 

Nb. Our comment from the 09/09/20

 

We sincerely hope you took heed, as this is exactly the result the market was extremely vulnerable to.

In fact, we think it did exceptionally well to hold in the R2 ratio bandwidth for just over a day.

We did tweet yesterday the fact the zone had changed, as it eventually, and expectedly, moved up to 3345-3355.

Which, had you been aware, would have made interpreting yesterday’s market movement very interesting, as the low after the initial burst of selling was 3345.

Or, to put it another way, the first support it found, was the bottom boundary of its new zone.

Decent rally ensued, before it spiked down again, and again, right on 3345.

Considering that this also represented a drop of 81-points, meant that this was despite the considerable impetus it had.

After that the market rallied, to the intraday high, before the final capitulation in the closing stages.

But, significantly, closing below its zone.

So today is sort of the last chance saloon for the bulls, well, for a bit at least.

The good news is that all the ratios are better below the zone, and R1 down here now starts at 3095.

The bad news, is that this is now the target, unless the bulls use the support generated by the zone to stage a fightback.

Both good and bad news, is that the entire Y ratio bandwidth, having started at 435-points wide, went out to 510, but is now just 425.

So not nearly so bad, but still excruciatingly wide, the consequences of which we have just seen.

Therefore, the bulls hope the zone’s support works, but bears not, simple as.

 

Range:            3095  to  3345         

Activity:          Poor 

Type:              On balance only just bearish

 

 

 

Nb. Our comment for 09/11/20

 

We really ran out of space, rather than omit, to tell you, back on the 9th, that the moves in the zone were likely far from over, and that 3395-3405, was looking bit of a shoe-in.

As with everything in hindsight, this was a mistake, as not only did the bulls put up a fight, this is exactly where the market rallied to.

But not only that, it changes the complexion of it all, especially in light of yesterday’s fall.

Of course, when it moved, it gave a strong signal, and target, to the bulls.

But, when the market failed to hold, it also gives a lot more credence to the bears, as if the zone was still at 3345-3355, then yesterday’s drop was just in keeping with where the natural market gravitational forces would direct it.

However, now comes the really difficult part, as both, or either, could still be the zone.

It will take a day or so, for one or the other, to cement its claim, and as it is rollover and expiry next week, we are plumb out of time.

The only way we can think of understanding/explaining this situation, at least for today, is to think of the zone going from 3345 all the way up to 3405.

Normally, this would be an amazing 60-points worth of zero ratio, astonishing in a triple really, but as markets are just so weird at present, we do not think that this will make that much difference, bizarrely.

In these brave new times, we still have a Y ratio bandwidth of 410-points, inside of which, the Y1 ratio bandwidth stretches for 260-points, so calling 60 of those zero, when they are already just above absolute minimum, will not make a great deal of difference we suspect.

Aside from this, worth noting is that below the zone the ratios (apart from R2 & R3) haven’t changed, but above, they have strengthened, which is a first for this expiry, and, therefore, very noteworthy.

The upshot is, that bears are in control, and flexing their muscles, but when it comes to next week, anywhere in this ridiculously massive Y ratio bandwidth, is absolutely fine, so big moves, whipsaw and volatility are the name of the game, enjoy.

 

Range:            3095  to  3395         

Activity:          Moderate

Type:              On balance only just bearish

 

Available to buy now

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Posted in Uncategorized

September 9th, 2020 by R1chard

The SPX and the consequences of having such a massive Y ratio bandwidth.

 

Nb. Our comment from the 09/03/20

 

At least we now know how the SPX reacts to R2, as on the very day of our last comment (31st August) it had a good go at it.

The first attempt saw the upper shadow just touching it, before beating a hasty retreat.

Then we had two more attempts, just touching 3510, before being repulsed.

A couple more in the afternoon, again just touching it, before a more concerted attempt, resulting in the intraday high of 3514.77, and lasting about 10 minutes, before it too got knocked back, resulting in the close at 3500.31.

Tuesday saw the market test the new R1 level, at 3495 (intraday low 3494.60), before it rallied, eventually testing the new R2 level, at 3530, with the intraday high of 3528.03.

This was also a ratio bandwidth test, which normally results in a breakout.

Which is exactly what we got Wednesday, and R2 was now at 3555, which the market again just touched with an upper shadow, then established the intraday low before going back for the breakout.

The point of all this is to underline the fact that this index really needed to go through the entire playbook before it could breach R2, a level of ratio that was backpedalling fast, going from 3510 to 3555 in just three days,

And, is now, holding at 3555, but just look at how much ground R3 has conceded.

It was a hard-fought victory over R2, so hat’s off to the bulls, but how happy they will be within the R2 ratio bandwidth remains to be seen.

Eventually, the ratios below the zone must move up, as must the zone itself, but as it stands it is almost as if the retreating ratios above the zone are the only influence, and just simply sucking the market up after it.

This is all well and good, but sometimes the real battle is holding on to the ground you have just won, as the dynamic delta is there now every step of the way.

And the risk remains, as the Y ratio bandwidth is now an excruciating 510-points wide.

Also, there are just over two weeks to go, so those bulls really have their work cut out for them.

 

Range:            3555  to  3805         

Activity:          Moderate 

Type:              Neutral

 

Nb. Our comment for 09/09/20

 

We sincerely hope you took heed, as this is exactly the result the market was extremely vulnerable to.

In fact, we think it did exceptionally well to hold in the R2 ratio bandwidth for just over a day.

We did tweet yesterday the fact the zone had changed, as it eventually, and expectedly, moved up to 3345-3355.

Which, had you been aware, would have made interpreting yesterday’s market movement very interesting, as the low after the initial burst of selling was 3345.

Or, to put it another way, the first support it found, was the bottom boundary of its new zone.

Decent rally ensued, before it spiked down again, and again, right on 3345.

Considering that this also represented a drop of 81-points, meant that this was despite the considerable impetus it had.

After that the market rallied, to the intraday high, before the final capitulation in the closing stages.

But, significantly, closing below its zone.

So today is sort of the last chance saloon for the bulls, well, for a bit at least.

The good news is that all the ratios are better below the zone, and R1 down here now starts at 3095.

The bad news, is that this is now the target, unless the bulls use the support generated by the zone to stage a fightback.

Both good and bad news, is that the entire Y ratio bandwidth, having started at 435-points wide, went out to 510, but is now just 425.

So not nearly so bad, but still excruciatingly wide, the consequences of which we have just seen.

Therefore, the bulls hope the zone’s support works, but bears not, simple as.

 

Range:            3095  to  3345         

Activity:          Poor 

Type:              On balance only just bearish

 

 

Available to buy now

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September 7th, 2020 by R1chard

For the FTSE the real hard work starts now.

 

Nb. Our comment from the 09/01/20

 

Wowee, the first week in the Sept expiry certainly didn’t disappoint, as it had it all in there.

One of the really good things about the FTSE ratios, is they tend not to change that much, especially in the triples, so when you know where they are it is just a question of watching the market interact with them.

Perfect case in point, was Monday 24th August, and don’t forget the previous Friday this index had tested R3 with the intraday low of 5948.80, so our eyes were on 6050, being the ratio level at the other end of that bandwidth.

And the market just blew it away in the first few minutes of trading.

That made the next target 6150, the bottom boundary of its zone, and it duly obliged the very next day, with the intraday high of 6173.48.

Basically, it had achieved in two days what we thought might take it a week or two.

The warning sign was when it couldn’t hold itself in its zone, and was clearly a case of too far too fast to us.

6050 then became the focus, and the last three days of last week were all about that level, and we lost count how many times the market challenged it, and lost.

Which basically put our old friend, 5950, firmly back into the picture.

Which is where we find ourselves today, and they aren’t quite as strong as they were last week, but there is little in it, so R3 should prove a very stern test for the bears, as this level of ratio should provide quite a considerable amount of futures buying courtesy of the dynamic delta, so keep your eyes on those screens, as any decent bounce off this level should provide enough impetus to push it back past 6050 and get it heading back towards its zone.

 

Range:            5950  to  6050        

Activity:          Moderate

Type:              Neutral

 

 

Nb. Our comment on 09/07/20

 

No bounce off 5950 this time, and it probably didn’t help the fact that London was closed on Monday 31st August.

As this meant it had to play catch-up to a what was a weak Europe and the US on that day, when they came back on the Tuesday.

But, DR at 5850, did put up a decent fight, as it should, as that is a more appropriate level for a triple.

And the first three days of last week were all about 5850 and DR, with the close on Tuesday an impressive recovery to end at 5862.05.

Wednesday saw a rally, but sadly ran into our old friend 5950, which did make that a bandwidth test.

And it did try on the Thursday, getting as high as 5996.24, but the fact it eventually closed at 5850.86, was as blatant a signal that you could get.

The fact it closed right on DR held out a glimmer of hope, otherwise why else would it, but the surrounding environment was not going to give it any assistance, especially with the Street being so weak, which was a problem we highlighted right at the very start of this expiry of course.

What we said back then was the SPX was above its zone, bumping into the R ratios, whereas the FTSE “was the polar opposite”, and no prizes for guessing which one won.

For the FTSE, it is now a very long way down to the next ratio level, but the bears are obviously struggling to cope with DR, and with two weeks to go, it won’t be long before the zone comes into play.

But it now has to get back up and over, not only DR but also R3 at 5950, to stand a chance by next week, so its certainly no given.

 

Range:            5550  to  5850        

Activity:          Very poor

Type:              On balance decently bearish

 

Available to buy now

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September 3rd, 2020 by R1chard

Can the SPX maintain this aggression esp now vs R2 Ratio

 

Nb. Our comment from the 08/31/20

 

Well the SPX has shown it has a bit of strength behind it at last, and all very predictable in that it has taken a triple to get the juices flowing again.

Ordinarily, we would expect an index to trade between very high levels of ratio, DR and the B’s, in a triple, but as one can see, the ratios only go as high as R3.

Which just goes to highlight how weird the overall situation is, as this is, and there is no other word for it, pathetic levels of activity produced ratios.

In the last few expiries this index has quite happily marched upwards through retreating ratios, but has struggled when it came up against, sometimes just Y2, but definitely R1.

So, it hasn’t really been tested properly in four to five months, so facing off against R2 is bit of an unknown.

Sadly, how it beat R1 is not much of a help either, as when we last published, on the 25th August, that very day this market hit 3444.21, and closed at 3443.62.

Which was all well and good, as R1 was at 3445, but the next day it gapped up at the open to 3449.97, leapfrogging R1 altogether, so it didn’t really answer any questions as that is sort of a cheat really.

If it does get over R2, then it has plenty of room before encountering R3, but, and this is a big but, back in the March expiry (the first triple of 2020 hem hem) R1 was at 3385 and R2 3405, however the then all-time high had just been hit the week before,3393.52.

Out of curiosity, the corresponding R1 (i.e. Below the zone) was at 3195, giving a Y ratio bandwidth of just under 200-points, whereas today, this bandwidth stands at 485-points, so please don’t make the mistake of thinking this is a risk-free market.

The similarities are uncanny, but this time we know what we are dealing with, at least disease-wise, although the jury may still be out economically speaking.

 

Range:            3480  to  3510         

Activity:          Moderate 

Type:              Neutral

 

 

Nb. Our comment for 09/03/20

 

At least we now know how the SPX reacts to R2, as on the very day of our last comment (31st August) it had a good go at it.

The first attempt saw the upper shadow just touching it, before beating a hasty retreat.

Then we had two more attempts, just touching 3510, before being repulsed.

A couple more in the afternoon, again just touching it, before a more concerted attempt, resulting in the intraday high of 3514.77, and lasting about 10 minutes, before it too got knocked back, resulting in the close at 3500.31.

Tuesday saw the market test the new R1 level, at 3495 (intraday low 3494.60), before it rallied, eventually testing the new R2 level, at 3530, with the intraday high of 3528.03.

This was also a ratio bandwidth test, which normally results in a breakout.

Which is exactly what we got Wednesday, and R2 was now at 3555, which the market again just touched with an upper shadow, then established the intraday low before going back for the breakout.

The point of all this is to underline the fact that this index really needed to go through the entire playbook before it could breach R2, a level of ratio that was backpedalling fast, going from 3510 to 3555 in just three days,

And, is now, holding at 3555, but just look at how much ground R3 has conceded.

It was a hard-fought victory over R2, so hat’s off to the bulls, but how happy they will be within the R2 ratio bandwidth remains to be seen.

Eventually, the ratios below the zone must move up, as must the zone itself, but as it stands it is almost as if the retreating ratios above the zone are the only influence, and just simply sucking the market up after it.

This is all well and good, but sometimes the real battle is holding on to the ground you have just won, as the dynamic delta is there now every step of the way.

And the risk remains, as the Y ratio bandwidth is now an excruciating 510-points wide.

Also, there are just over two weeks to go, so those bulls really have their work cut out for them.

 

Range:            3555  to  3805         

Activity:          Moderate 

Type:              Neutral

 

 

Available to buy now

The faction account of the Big Bang, The Great Storm and the market crash of 1987, available in eBook and paperback here, a must read if you don’t believe in history repeating itself.

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August 31st, 2020 by R1chard

Uncanny similarities in the SPX with the Mch triple expiry.

 

Nb. Our comment from the 08/25/20

 

The SPX is metaphorically the polar opposite of the FTSE.

So, where the FTSE was way below its zone, here, in the SPX, it is way above theirs.

There are a few mitigating factors, primarily the FTSE had just tested R3, where here it is still in the Y ratios.

Also, where the SPX’s zone stands, is more of a hangover from the last expiry.

Which, is somewhat appropriate, as we can’t see much difference in this expiry set up to August’s.

Therefore, basically expect more of the same, a rising zone, falling ratios above it and rising beneath it.

And, our main concern also remains exactly the same, that the Y ratio bandwidth is a stupidly massive 435-points wide.

For us, therefore, the only unanswered question, is the degree of sensitivity to the dynamic delta we can expect from the SPX this trip, especially as, historically, triples have only been reversal sensitive to DR and above.

Hopefully we won’t have to wait too long, as R1 is currently at 3445, just a smidgen above where the market is now.

Finally, this trip is no longer chasing a high, as all highs are now new all-time ones.

Bizarrely, if markets are this good under these conditions, the new scary scenario, is the old normality, which takes a bit to get one’s head around.

 

Range:            3205  to  3445         

Activity:          Moderate 

Type:              Neutral

 

 

 

 

Nb. Our comment for 08/31/20

 

Well the SPX has shown it has a bit of strength behind it at last, and all very predictable in that it has taken a triple to get the juices flowing again.

Ordinarily, we would expect an index to trade between very high levels of ratio, DR and the B’s, in a triple, but as one can see, the ratios only go as high as R3.

Which just goes to highlight how weird the overall situation is, as this is, and there is no other word for it, pathetic levels of activity produced ratios.

In the last few expiries this index has quite happily marched upwards through retreating ratios, but has struggled when it came up against, sometimes just Y2, but definitely R1.

So, it hasn’t really been tested properly in four to five months, so facing off against R2 is bit of an unknown.

Sadly, how it beat R1 is not much of a help either, as when we last published, on the 25th August, that very day this market hit 3444.21, and closed at 3443.62.

Which was all well and good, as R1 was at 3445, but the next day it gapped up at the open to 3449.97, leapfrogging R1 altogether, so it didn’t really answer any questions as that is sort of a cheat really.

If it does get over R2, then it has plenty of room before encountering R3, but, and this is a big but, back in the March expiry (the first triple of 2020 hem hem) R1 was at 3385 and R2 3405, however the then all time high had just been hit the week before,3393.52.

Out of curiosity, the corresponding R1 (i.e. Below the zone) was at 3195, giving a Y ratio bandwidth of just under 200-points, whereas today, this bandwidth stands at 485-points, so please don’t make the mistake of thinking this is a risk-free market.

The similarities are uncanny, but this time we know what we are dealing with, at least disease-wise, although the jury may still be out economically speaking.

 

Range:            3480  to  3510         

Activity:          Moderate 

Type:              Neutral

 

Available to buy now

The faction account of the Big Bang, The Great Storm and the market crash of 1987, available in eBook and paperback here, a must read if you don’t believe in history repeating itself.

Posted in Uncategorized