SPX , NDX & DJX Ratio Table 25th Sept 2018
Rather ironically the ratios above the zone in the SPX look unchanged, but both R1 and R2 were at 2940 and 2955 on Friday.
This is worth knowing as the intraday high on Friday was 2940.91, so even though R1 is now 2945 the market will now anticipate it 5-points earlier.
The fact the close yesterday was right on Y2 is also not a coincidence, to us at least, and means the market, only in its second day of this expiry as well, now knows what ratio is where.
Means today is a decision day, which is good as it means this expiry is already looking active and meaningful.
However, there is no disguising the fact the R ratios are very close to where the market is currently, which leaves 100-points down to the corresponding level.
Still very early days and there is also the zone as support before we get into bearish territory, so the party is far from over, just the risk went up a couple of notches.
Range: 2905 to 2945
Activity Very good
The NDX has seen its ratios come in considerably, but, being frank, you could still drive a convoy of bus’s through them.
Anyway, at least it’s a start, but what is slightly troubling is that overall, especially for an intermediary, the activity is ok, so this huge Y1 ratio bandwidth under these circumstances tells its own story.
At least we very much doubt that the market is going to wait for the ratios as yesterday the intraday low and high was 7447.23 and 7554.95.
This is 25-points either side of their zone, so an extended zone bandwidth test, which is also symptomatic of high aggressiveness, which tends to increase rather than dissipate, so should be a fun ride, and the fact it chose to close above gives that the direction of choice.
Range: 7525 to 7700
Activity: Very good
When we last looked at the Oct DJX then the zone was 26100-26300, so it has already moved up a bit.
And despite activity being high, which is really just a manifestation of a little going a very long way in the absence of anything much, this move hasn’t really altered the picture very much.
The big difference is Y2 below the zone has jumped considerably, but what allowed the zone to move in the first place was the dearth of any ratio above it, and that remains the case.
There is a step-up at 27000, but in the grand scheme of things that’s a step in a dolls house rather than a flight of stairs.
The fact that the high yesterday was 26709, or the upper boundary, is more worrying than rewarding, as there is so little ratio there this is a sign of ultra-sensitivity.
Basically, the zone may trap it for a while, but just the slightest of nudges would see it escape, and if it does then unlimited upside with plenty of scope below, so it could start acting like the NDX with 1%+ moves commonplace.
Range: 26500 to 26700
Type: On balance only just bearish