SPX , NDX and DJX Ratio table 31st Jan 2018
On Friday we left the SPX in its R1 ratio bandwidth just below R2 at 2845.
The open that day was 2847.48 which confirmed the level of bullish aggression we had been seeing, but also as we pointed out, that this was overstretched and “not without risk”.
As one can see R2 is now 2875, so the ratios above the zone continue to collapse, but rather worryingly they have not really filled in below the zone which has also stayed static.
So, the open and 2830 are the main points today as it either needs to maintain this aggression or 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.
Range: 2755 to 2830 or 2830 to 2875
Type: On balance just fractionally bearish
We left the NDX last Friday just below the huge step-up level at 6925 highlighting the previous 2 closes that were just below it.
The highs on those two days were 6992.91 and 6967.60 so Friday was not only strike 3 but by the very depth of incursion previously the intent was plain to see.
We perhaps should have mentioned the next step-up level, which was 7025, and which is now Y2 in its own right, but the fact the high was 7022.97 on Friday and 7020.64 on Monday means it was more aligned to the DJX than perhaps we thought.
Otherwise not a lot else has changed and it is still in a sea of Y ratio.
Range: 6825 to 7025
Activity: Very strong
Type: On balance decidedly bearish
We left the DJX at 26392 with the ratio levels last Friday showing B1 at 26600.
We sincerely hope you took note as the high that day was 26616, which was also the close, and then on Monday the high was 26608, so since hitting B1 it has retreated virtually 600-points.
Looks like all those bears that we highlighted were out there for the first time in ages were not that benign, or just insurance.
This 2%+ pullback has not only stimulated activity here but has changed the ratio landscape considerably, as you can see in the above table.
We just can’t stress enough how significant it is for this index to get back to its NZ, or what happens now it is back inside.
Range: 25900 to 26100
Activity: Very strong