SPX , NDX & DJX Ratio Table 20th Nov 2018
The mighty Dec expiry never disappoints, and this is only day 1 of a five week long one.
The SPX has hit its R ratios, with a degree of overshoot, and we are really very unconcerned with that as the momentum built up would always make the small line in the sand that is R1 like trying to stop a stampeding bull, or bear in this instance.
Also, it was not only day 1 but with the zone stuck up at 2795-2805 this needs to adjust, and quickly too, as that will always undermine the support levels until it does.
It is obviously trying, hence the weird and rather unique situation of having 100-points of Y1 ratio below the zone.
In any triple, let alone the biggest of them all, we would not be surprised to see no ratio at all, so with so much below, and even some above, it just reveals how thin it is out there, so unless the DJX’s zone rescues matters it could remain exceedingly volatile.
Range: 2670 to 2695 or 2695 to 2795
The main problem with the NDX was that from the close of play on Friday it was always going to start the Dec expiry in an awkward or bearish position.
However, in our note we did “expect the dynamic delta to kick in” as when we wrote that R1 was standing at 6670.
But in distinct parallels with the SPX, where the zone hasn’t moved, here it has, but the undermining of the ratios in doing so is all too apparent to see.
As you can see the zone is now 7075-7125, a bit too little too late really, but more importantly R1 has slipped to 6475, a massive drop.
When one considers how high the activity is, and especially the type, then this collapse is even stranger.
Considering Y2 is now 6625 which this index is now only just above, then R1 is its last line of support, not to scare you unduly.
In yet another of those coincidences in may be worth noting that yesterday’s intraday low was in fact 6623.37.
And R1 may be so here, but as the SPX is now into their R ratios, they might just give each other a crumb of comfort.
Range: 6625 to 7075 or 6475 to 6625
Type: On balance bearish
To be fair if it wasn’t for Apple and Facebook, we doubt the DJX would have moved so quickly on the very first day of the new expiry.
But, the fact that it did, hit the intraday low of 24900, which is also their zones bottom boundary, before bouncing and finishing virtually dead centre of said zone could just be coincidence.
However, we did publish the ratio table with these very levels last week, and today Dec does become the alpha expiry, so at the very least it has to be a very high odds call.
There is not much we can add to the table above, obviously the zone is now critical, but any breach and there is a very long way to go before this index encounters the next level of ratio.
Range: 24900 to 25100