It was a truly awful end to 2018 and at
this very point in the Dec expiry we were using the analogy of it escaping from
under the pile-driver it was trapped beneath.
The net result was the Jan expiry opened
with an unprecedented bandwidth of Y ratio, a truly astonishing 350-points
It still didn’t stop the SPX from
testing R3 at 2345 with the intraday low of 2346.58, which, so far, is the
expiry low as well.
The fact the market responded, and quite
emphatically, finishing up 117-points that day at 2467.70, revealed it had
broken free from the pile-driver, courtesy of the new expiry no doubt.
Rather intriguingly the Y ratio
bandwidth has stayed incredibly broad, so it has the opportunity to cut loose,
but the DJX was quite a limiting factor.
The fact that their zone is hovering
near the market, or vice versa, we suspect means they want a quiet expiry.
Good luck, is all we can say, as the Y ratio bandwidth still stretches from 2470 all the way up to 2685, so from our perspective anything can happen under these circumstances.
to 2580 or 2580
Type: On balance only just bullish
Don’t forget we do not make the rules,
just report the numbers.
This is, in fact, the essence of the
problem, as there are no numbers.
It may well be that one of the other two
step up and take charge, but as things stand here in the SPX it certainly won’t
be this index doing that.
Intermediary expiries to intermediary,
apart from being the least common, tend to be noticeably underrepresented, but
this is going way past that.
The fact is that the zone is a little
bit higher, but the minimal Y1 ratio is so minimal that it could be the zone in
The Y ratio bandwidth “is only”
290-points wide, so less than Jan at this stage, but this is still ridiculously
wide, and, more to the point, there is no depth.
On both sides the ratio only goes as
high as R2, at least last expiry we saw some DR.
Still a few days to go, but skittish doesn’t go anywhere near enough to describing how this index may be in the Feb expiry, and that’s in either direction.