Category: Uncategorized

June 7th, 2019 by R1chard

Nb. Comment from 05/29/19

It is very difficult to appreciate that this is in fact a triple witch expiry, or quadruple as the US likes to call them, as the activity remains so low.

The level overall is much more befitting a biggie, but it all looks passive.

And, we are back to that ridiculously wide zone.

However, and as we pointed out, the bottom boundary is hugely significant.

Last Thursday, the 23rd, this index got as low as 25328 before finishing at 25490.

At the time we mentioned how statistically irrelevant 10-points is on a twenty-five-thousand-point index, and the opening gap up the next day just went to underline this.

The fact that the next day, Friday, the intraday low was 25496, was also very telling.

So, yesterday, it was looking good, but right towards the end the market got spooked, and, hey presto, strike 3.

The only good news is that the next level of support is actually rather close, and it jumps straight in at R2, please see above table.

Otherwise, it’s going to be all down to the SPX, please see our previous comment on the 21st May, and from our calculations on the 28th R2 here is still at 2770.

The expiry still has a very long way to go, but it is heating up nicely, and now we are testing levels, both in this index, the DJX, but also the SPX, this will ignite activity, if only because of the dynamic delta, so the fun starts now, for us at least.

Enjoy.

Range:            25000  to  25500              

Activity:          Very poor

Type:              Neutral

Nb. Comment on 06/07/19

Well, we certainly hope you are having fun by now.

Shortly after our last comment the bottom boundary did indeed cave in, and as it was already on strike 3 this was hardly a surprise.

This then left R2 at 25000 as the next line of support, and if the SPX was having a titanic battle with their R2, the DJX was certainly not being overshadowed.

Last Friday and on Monday this index closed at 24815 and 24819 respectively, which was very troubling as both were deep inside their R2 bandwidth.

The only saving grace was that on both days the SPX was just then hitting their R2.

It seems it was the SPX that turned the tide, although with this index being in their R2 then it would most certainly have aided and abetted.

It is a triple, so big numbers are more likely than not, but it is worth bearing in mind that the strength of the bearish sentiment took two indices in R2, which is a lot of dynamic delta futures buying, to eventually turn the tide.

The fact that this index bounced straight back up into their zone is only what we would expect, and the same goes for the SPX.

The unexpected part is how much Y ratio there still is in both, especially as this expiry is a triple, where we would expect to see none, or at least, very little.

The only ratios to change here are Y2 drops to Y1 and DR comes in to 24000, both below the zone.

As it stands this index is now back in its super-wide zone, so happy days, but the real battle will be the SPX we believe, and there, might it even get back to bullish territory?

Range:            25500  to  26500             

Activity:          Moderate      

Type:              On balance definitely bearish

Posted in Uncategorized

June 5th, 2019 by R1chard

Nb. Our comment from 05/30/19

Actually, the first thing we should point out that back on the 24th R2 was at 2770, as seen in the table above, but it was unchanged when we calculated the ratios in the SPX on the 28th, and referenced in our comment on the DJX on the 29th.

This is very important, as yesterday’s intraday low was 2766.06, but also it was the manner of this low that was significant, as this was just a spike, whereas the market did hover around the 2770 level for quite a while.

Whilst, on this subject, it was a very similar story for the DJX and their level at 25000.

Even more significant, is the fact that R2 has receded to 2745, and interestingly this is the only ratio to move.

2770 will naturally turn into what we refer to as a “step-up”, but hopefully, unless you are a bear of course, the market will not need to test this level again, the job being done yesterday.

However, this is far from being a done deal, and below the zone the market is in bear mode, and falling ratios are bearish, but it is the first decent level of support this index has encountered, so it might rejuvenate the bulls.

Having said that, it is worth noting that yesterday this index gapped down at the open, starting at 2790.25, so already significantly below R1 at 2795.

Of course, this now makes 2795 a hurdle, so now a critical level.

Basically, now the front line between the bulls and the bears.

Also, please be aware, above the zone, which is still 2845-2855, there is still acres of Y ratio, so if the bulls do regain control, they have an awful lot of space to express themselves in.

Range:            2745  to  2795  

Activity:          Poor  

Type:              On balance only just bearish

Nb. Our comment on 06/05/19

What another titanic battle with R2 for the SPX again.

Excellent.

As we said, “Even more significant, is the fact that R2 has receded to 2745” and “if the bulls do regain control, they have an awful lot of space to express themselves in”, so we sincerely hope you took note.

Between the SPX and the FTSE, we have just witnessed two rather epic ratio inspired support battles, and the good news is, there is still two more weeks of this expiry to go.

The new ratio table is above, and the two aspects to note are that R1 below the zone has slipped to 2770, and R3 to 2695.

The fact that R2 hasn’t moved doesn’t mean it is not weakened, just that it is now at the lower end of R2 rather than the higher end.

Therefore, the ratios are obviously continuing to weaken below the zone, which is bearish, with the saving grace being that the zone itself hasn’t moved.

This, may not be the case for long, unless the bulls really do establish a rally, as the weakness in the ratios below the zone could now easily precipitate a move for it to 2820-2830.

More to the point, the longer the market stays below its zone, the more likely that this could just be the first step.

At the end of the day, fantastic bounce off R2, but it is still in the middle of an enormous Y ratio bandwidth, so nothing resolved yet.

And, if anything, perhaps a sign of things to come, as 2% or 3% daily moves in these conditions are actually only to be expected.

Range:            2770  to  2845           

Activity:          Poor         

Type:              On balance just fractionally bearish

Posted in Uncategorized

June 3rd, 2019 by R1chard

Nb. Our comment from 05/22/19

The FTSE is a classic example of the expiry of one month (May) leaving another (June) in a difficult position.

For May, where the zone was 7350-7450 at the end, it was a tremendous achievement for this index to claw itself all the way back up from R1 at 7150 (intraday and expiry low 7150.89 13th May) to get to consecutive closes of 7353.51 and 7348.62 on the final two days. Well done.

The trouble, as is plain to see, that in June the zone was, and still is, 7150-7250.

And just to compound that, the ratio above it is already R3.

So, June has been born into a very high level of ratio.

No wonder it doesn’t know which way to turn.

Will it be necessary for this index to test DR at 7450, who knows?

As it stands, to us it doesn’t appear as if it has the bottle, as 7350 seems to be a tough hurdle, and this is only R3, which is what it’s in anyway.

It is not beyond the realms of possibility, but, as is also very plain to see, the ratios above the zone are far far greater than those below it.

Therefore, if it does, and 7550 is not impossible, as triples often go between the B ratios, or at least did a while back, we see this as only deferring the inevitable.

The real issue for us, in the five weeks that lie ahead in this expiry, is whether the bottom boundary of the zone will hold.

As, looking at it as it stands, the next ratio support level doesn’t kick in until 6950.

And, as this index is already ploughing through R3, then we doubt R2 will provide that much support.

The next few days should clear things up a great deal, but if we are to get a DR to DR expiry, and don’t forget May traded between the R ratios, you could be looking at a range of 600-points, which definitely deserves a wow wee.

Range:             7250  to  7450   

Activity:            Poor

Type:               On balance definitely bearish

Nb. Our comment on 06/03/19

As we said in our last comment on the FTSE back on the 22nd May the defining moment for this expiry we believe will be if the bottom boundary of the zone holds.

On the 29th May the intraday low was 7151.37, before the market managed to close 34-points higher, but was strike one.

Strike two came on Friday 31st May when the intraday low was 7130.85, but the close at 7161.71 was a very hard-fought battle, making it even more impressive to hold in its zone.

This support holding has certainly been helped by the ratio below the zone moving up to R1, but don’t forget this index was born into R3 ratio on the first day of this expiry with the open of 7348.62, and it is also now on strike three.

If Friday was tough then the next time it goes there will be even tougher.

The ratio below the zone may have risen, but it is still the same all the way down to 6950, so if the bottom boundary does crack, then that’s a lot of points before the next level of support.

So, 7150 is really a very critical level, still.

Range:             7150  to  7250          

Activity:            Poor      

Type:                On balance definitely bearish           

Posted in Uncategorized

May 30th, 2019 by R1chard

Nb. Our comment from 05/24/19 (Not published online)

Just as we said “please take it for granted that the zone here should be 2845-2855” and now we see confirmation of that in the table above.

Although, in truth, had you been following the SPX then on Monday, Tuesday and Wednesday it would have been blatantly obvious the impact that 2845 and 2855 was having on this index.

Nevertheless, it is good it has got the move done, as delaying it can retard the development of the ratios until it does so.

However, for us, the real question is whether or not the intraday low yesterday was a test of R1 or not?

This low was 2805.49, and as one can see in the tables above, R1 has stayed put at 2795.

10-points even when this index was down 50.78-points is a lot to ask of the corresponding spike in the Vega, so we are going to call that close, but a miss all the same.

The other potentially relevant fact is where the market closed, at 2822.24.

As this is just above Y2, which also hasn’t changed.

This close is bullish, but don’t forget, we are just talking about Y2.

The more important level is the bottom boundary in the DJX, which is at 25500, and importantly that index closed at 25490.

10-points on a twenty-five-thousand-point index is statistically irrelevant, but below is below.

This makes today’s open very crucial, for both indices.

So, there is light at the end of the tunnel, but without that solid test of R1 there is a risk remaining, but now there is as much Y ratio above the new zone as there is below it, so the potential is definitely exciting.

Range:             2795  to  2845  

Activity:            Moderate  

Type:                On balance bearish

Nb. Our comment on 05/30/19

Actually, the first thing we should point out that back on the 24th R2 was at 2770, as seen in the table above, but it was unchanged when we calculated the ratios in the SPX on the 28th, and referenced in our comment on the DJX on the 29th.

This is very important, as yesterday’s intraday low was 2766.06, but also it was the manner of this low that was significant, as this was just a spike, whereas the market did hover around the 2770 level for quite a while.

Whilst, on this subject, it was a very similar story for the DJX and their level at 25000.

Even more significant, is the fact that R2 has receded to 2745, and interestingly this is the only ratio to move.

2770 will naturally turn into what we refer to as a “step-up”, but hopefully, unless you are a bear of course, the market will not need to test this level again, the job being done yesterday.

However, this is far from being a done deal, and below the zone the market is in bear mode, and falling ratios are bearish, but it is the first decent level of support this index has encountered, so it might rejuvenate the bulls.

Having said that, it is worth noting that yesterday this index gapped down at the open, starting at 2790.25, so already significantly below R1 at 2795.

Of course, this now makes 2795 a hurdle, so now a critical level.

Basically, now the front line between the bulls and the bears.

Also, please be aware, above the zone, which is still 2845-2855, there is still acres of Y ratio, so if the bulls do regain control, they have an awful lot of space to express themselves in.

Range:             2745  to  2795           

Activity:            Poor         

Type:                On balance only just bearish            

Posted in Uncategorized

May 29th, 2019 by R1chard

Nb. Comment from 05/023/19 (Not published online)

Range:                

Activity:          

Type:        

 

Nb. Comment on 05/29/19

It is very difficult to appreciate that this is in fact a triple witch expiry, or quadruple as the US likes to call them, as the activity remains so low.

The level overall is much more befitting a biggie, but it all looks passive.

And, we are back to that ridiculously wide zone.

However, and as we pointed out, the bottom boundary is hugely significant.

Last Thursday, the 23rd, this index got as low as 25328 before finishing at 25490.

At the time we mentioned how statistically irrelevant 10-points is on a twenty-five-thousand-point index, and the opening gap up the next day just went to underline this.

The fact that the next day, Friday, the intraday low was 25496, was also very telling.

So, yesterday, it was looking good, but right towards the end the market got spooked, and, hey presto, strike 3.

The only good news is that the next level of support is actually rather close, and it jumps straight in at R2, please see above table.

Otherwise, it’s going to be all down to the SPX, please see our previous comment on the 21st May, and from our calculations on the 28th R2 here is still at 2770.

The expiry still has a very long way to go, but it is heating up nicely, and now we are testing levels, both in this index, the DJX, but also the SPX, this will ignite activity, if only because of the dynamic delta, so the fun starts now, for us at least.

Enjoy.

Range:            25000  to  25500             

Activity:          Very poor      

Type:              Neutral

Posted in Uncategorized

May 22nd, 2019 by R1chard

Nb. Our comment from 05/17/19 (Not published online)

Range:           

Activity:         

Type:       

      

Nb. Our comment on 05/22/19

The FTSE is a classic example of the expiry of one month (May) leaving another (June) in a difficult position.

For May, where the zone was 7350-7450 at the end, it was a tremendous achievement for this index to claw itself all the way back up from R1 at 7150 (intraday and expiry low 7150.89 13th May) to get to consecutive closes of 7353.51 and 7348.62 on the final two days. Well done.

The trouble, as is plain to see, that in June the zone was, and still is, 7150-7250.

And just to compound that, the ratio above it is already R3.

So, June has been born into a very high level of ratio.

No wonder it doesn’t know which way to turn.

Will it be necessary for this index to test DR at 7450, who knows?

As it stands, to us it doesn’t appear as if it has the bottle, as 7350 seems to be a tough hurdle, and this is only R3, which is what it’s in anyway.

It is not beyond the realms of possibility, but, as is also very plain to see, the ratios above the zone are far far greater than those below it.

Therefore, if it does, and 7550 is not impossible, as triples often go between the B ratios, or at least did a while back, we see this as only deferring the inevitable.

The real issue for us, in the five weeks that lie ahead in this expiry, is whether the bottom boundary of the zone will hold.

As, looking at it as it stands, the next ratio support level doesn’t kick in until 6950.

And, as this index is already ploughing through R3, then we doubt R2 will provide that much support.

The next few days should clear things up a great deal, but if we are to get a DR to DR expiry, and don’t forget May traded between the R ratios, you could be looking at a range of 600-points, which definitely deserves a wow wee.

Range:            7250  to  7450          

Activity:          Poor      

Type:              On balance definitely bearish

Posted in Uncategorized

May 21st, 2019 by R1chard

Nb. Our comment from 05/17/19 (Not published online)

Range:            

Activity:          

Type:     

          

Nb. Our comment on 05/21/19

In our last comment covering the May expiry we said we expected to see the zone there finish at 2845-2855, which it duly did.

The reason we mention this, is because this expiry, the June triple, is still at the old level, but this is purely due to the fact that these “biggies” just aren’t so nimble on their feet.

 So, even though it hasn’t changed, please take it for granted that the zone here should be 2845-2855.

And, although it has just been two trading days, since we last looked at the ratios there have not been many changes.

Therefore, the fact that so much Y ratio persists below the zone is not a good thing, and until the zone changes, this will retard development undoubtedly.

Also, don’t forget this is a five-week expiry.

Put these two elements together, and you will, and currently do, have, 135-points of Y ratio.

And in a triple.

To put this into perspective, normally we would not expect to see any at all.

On top of this, you should be aware that the serious R ratios below the zone, do not start until the low 2700’s, and then, they only go up to R3, an incredibly long way shy of the B level ratio we would expect to see in a triple.

Above the zone, it is slightly better, but it still only gets as high as DR ratio, so far from ideal.

So potentially a fantastic trading expiry, but for asset managers probably a worst-case scenario, as with the trading range in the Y ratio alone of 2795 all the way up to 2930, you have nigh on a 5% range.

Assuming this is one-way, as more than likely, just as in May, it will be one way, than a reverse to cover the other way, before reversing again for the finish, so easily 10%.

Get your timing wrong when you are considering this degree of percent and it will not look pretty, but for traders, it should be great fun.

Range:            2795  to  2895           

Activity:          Moderate         

Type:              On balance only just bearish            

Posted in 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            

Posted in Uncategorized