SPX , NDX and DJX Ratio Table 6th Feb 2018
As we said in the SPX “was overstretched and not without risk …… if it remains in the Y ratios then this is one very wide bandwidth which could make the 20 or 30-point moves look like a practice”.
Evidently it couldn’t maintain its aggression and couldn’t get back above 2830 and on Friday the close was 2762.13, very close to their zone, so exactly what we would have expected.
Monday (and the DJX) was the issue, and in our last table please remember R1 didn’t start until 2670, so once below their zone this was exactly what we meant by being overstretched, and also the next level.
The good news it is now in among the R ratios providing support, and there is quite a significant step up level at 2645, where it is nearer the R3 threshold than R2, and should provide ample evidence of whether or not the bulls are actually in full flight or not, as so far this to us is actually normal and is what should happen.
Range: 2620 to 2665
Type: On balance only just bearish
The NDX just highlights the entire situation in one table.
Here their zone has actually moved up, but only within the Y1 ratio bandwidth, which is and was the issue all along.
This stretches from 6475 all the way up to 7025, and the high here was 7022.97 on the 26th Jan please note.
The question here will be whether or not Y2 will provide enough support or will it need the R ratios?
Either way this is the first dynamic delta support here, just like the other two, so it’s first real bear test.
Range: 6475 to 6875
Type: On balance bearish
The DJX is now a very long way from its encounter with B1 at 26600, but just like the SPX this is exactly what should happen, although under more normal circumstances the support ratios would not be such a very long way away.
Lot of changes to the ratios and the zone is back to its rollover level, which is important as last week (Tuesday onwards) this index was in its old zone at 25900-26100.
The problem here was when it closed below this zone, or indeed the zone could have moved as we haven’t calculated the table since last Wednesday.
Nevertheless, in the old table R1 was at 24400, whereas today its straight into R2 at 24300, so this area was always where the support started.
So, the only question that remains is whether or not this is just a tumble through minimal ratio or now they actually have to sell futures into the dynamic delta buying, will they?
Range: 23900 to 24300 or 24300 to 25200
Type: On balance only just not bearish