Nb. Our comment from the 08/18/20
Well this has got to be the least exciting assault on an all-time-high ever.
Shame on you SPX, as the road is clear, all you need is the least possible effort.
By which we mean, all that stands between this market and a new high is the paltry Y1 ratio, well, at least now that is.
Perhaps the stumbling block has been Y2, although the dynamic delta produced by such low levels of ratio, really should not be a problem, as yesterday, it was standing at 3380.
The trouble is, that the longer it waits, then the rollover and expiry become more of an issue.
Although, at least, the zone here has moved up to where we anticipated, and it could easily just carry on, such is the dearth of ratio.
Our real issue throughout, has been the Y ratio bandwidth, and this continues to be a very scary 435-points wide.
It may all look good, and as we said back several expiries ago, this market was susceptible to a “crash-up”, such was the lack of meaningful ratio levels.
This doesn’t mean all is well with the world, it just means there is nothing to stop what it does naturally.
Our analogy is that it is like an automatic car, as even in neutral it will creep forward unless someone applies the brake.
And, if the minimal Y2 is acting as a brake, then the level of commitment out there is not much better than neutral.
Basically, our trading range says it all, which also reminds us of the end of last year and the beginning of this.
Range: 3305 to 3430
Activity: Very poor
Nb. Our comment for 08/21/20
At least it got its closing and all time high, but how dreary.
Actually, what’s worse, is it hasn’t made trading very easy either.
By which we mean, on Thursday 20th for example, Y2 had slipped to 3405, but the intraday high was only 3399.54.
However, the previous day, when Y2 was 3395, the intraday high was 3395.06, so this is bit of a hollow moan.
Although, with Y2 receding so fast, this market had the perfect opportunity to be a lot bolder in establishing its new high, which is something for the bulls to make note of, as you really couldn’t have had it any easier.
Even the upwardly mobile zone didn’t disappoint, making one more surge forward, to end at 3370-3380.
Which basically means the SPX not only achieved its high, but also finished as close to as in it, their zone.
But, again, there is so little ratio out there, then it is almost by default.
Having said that though, we saw the biggest level of activity, by a proverbial mile, tipping the scales at “very good”, so it was not an unconscious move by any means.
Furthermore, the Y ratio bandwidth eventually narrowed significantly, to end just 285-points wide.
Again, this is bit hollow, as 285-points is still ridiculously wide.
The third triple of the year up next, so activity will naturally be an awful lot higher, so this pedestrian pace should evaporate soon.
Range: 3380 to 3430
Activity: Very good