SPX , NDX and DJX Ratio Table 23rd Oct 2017
Hopefully we will not have to wait long in the SPX to get the first indication of how this new expiry could play out as Y2 is right on top of the current market.
Of course, how it reacts here will go a long way to determining the degree of sensitivity currently present, but don’t forget it is just Y2 and all last expiry this index tailgated R1 all the way up for weeks.
If it returns to normal then it could be a very exciting market as the Y ratio bandwidth stretches from 2470 all the way up to 2595, a very impressive 125-points.
However, there is no doubt we are in a bull market so in all likelihood we should just see the upper half of the range, so 2545 up to 2595.
Range: 2555 to 2595
Type: On balance just bearish
The NDX is the hardest one to call as ironically it has been acting normally but historically is the one more likely to generate the attention of the big players.
Suffice it to say this was the only index last trip to see beneath its NZ.
Apart from that blip it was sensitive to Y2 when it wasn’t being contained by its zone.
As the step-up level is also the bottom boundary of its NZ then we don’t see much weakness creeping in, although we would at least expect to see a test.
On the other hand, the step-up level is 6125 so there is a lot more leeway this side, but really a lot will depend on the DJX as that is the risk factor.
Range: 6050 to 6100 or 6100 to (6125) / 6200
Type: On balance only just bullish
The DJX has a very familiar shape to it which sadly doesn’t actually make it any easier.
However, the high level of activity has continued so it’s not short of participation, just any meaningful ratio.
We did see just a glimmer of a hint that normality might return here, which was then rudely snatched away in the rollover week.
So, the table above speaks for itself but it might be wise to appreciate that while there is no ratio above the zone there is also precious little below it.
Range: 22700 to 24000
Activity: Very strong
Type: On balance bullish