Friday was really all about the Dow and its zone but we did notice that here in the SPX the low was 2420.69 which is actually bang on the Y2 ratio level, and don’t forget this index had already had its day getting back to its zone for the rollover.
Y2 may have been enough for it in August but we suspect the mighty Sept expiry will take a bit more than this.
Therefore it is worth noting that at the bottom of our range the ratios jump an entire level so it will be a very good test for this expiries sensitivity.
Otherwise the main aspect to note is that there are 2 levels making noises towards being the next NZ, 2445-2455 and 2420-2430, but, and very much like Europe, it is obvious from the table there is a lot less ratio above the current market level than below it which should go a long way to offsetting any weakness in the zone.
Range: 2395 to 2470
Activity Very good
Type: On balance just fractionally bearish
The NDX is acting very similarly to the SPX in that it held onto its zone for the rollover then once this had been achieved and this support removed it fell back and now both start the Sept expiry a considerable way below their respective zones.
However unlike the SPX here they are in the Y1 ratio bandwidth that stretches a lot further down, and then only if it remains sensitive to Y2 in a big expiry as the R ratios are still a way below this.
Therefore we think it will have to rely on the others for direction and we will just have to wait and see if the big players come back as they will have a bloody nose from August and being a triple they might not be so keen anyway.
Range: 5625 to 5987
Type: On balance just bullish
Don’t forget in August the DJX’s NZ was 21500-21700 so as it closed at 21674 that was one of the more remarkable achievements for this index.
Of course here in September it is slightly lower and also a little bit more entrenched so it’s just a question of whether this flight to the zone will continue or will it revert to just ignoring it again.
In contrast to the SPX here it is still possible we may see it move upwards to 21900-22100, although today this does not look as likely.
It certainly has plenty of scope and being in a very wide Y ratio bandwidth that is only going to help, but 21600 is going to be a key level.
Range: 21600 to 22400