Nb. Our comment from 04/25/19 (Not
As this is our first coverage of the May
expiry there is no previous comment.
However, in our final comment for April
we stated “Our money is on it shifting to
2895-2905, as back at the start of this expiry this was R2, nudging on R3, so
that is a precipitous fall in the ratio down to Y1”, in respect of the
So really there should be no surprise
where May’s zone is, or the fact the expiry last Thursday was 2905, right on
the upper boundary.
As we said back then, the SPX does not
seem to have any emotions, bullish or bearish, it seems to be curve-fitting
more than anything else.
However, in doing so it has just made
the situation even worse, as there is now even more minimal ratio below the
Of course, it needs something to cry
“BOO!” and catch the market by surprise, but if that does happen then it is
worth being aware that R1 below the zone doesn’t even appear until 2770, well
over 100-points away.
It remains to be seen if this index will resume knocking on the door of R2 as it hasn’t even tested R1 at 2955 yet, and we suspect, this will depend on whether either of the other two have an agenda this trip.
Type: On balance bearish
Nb. Our comment on 04/29/19
Well it has certainly been bit of a
quiet start to the May expiry, although things could become far more
interesting now the market is just below a test of R1.
The only change in the ratio above the
zone is Y2 comes in ever so slightly.
Below the zone there are two changes, Y2
comes in to 2815 and R1 to 2775.
However, neither of these are
significant enough to change the overall picture as there is still a sea of
minimal Y ratio below the zone that stretches for 120-points.
Don’t forget, when you add in the zone
itself and the Y ratio above it that is another 60-points.
So, the fact remains, this market
remains very susceptible to any shocks, to the tune of almost 6%.
First things first, and a test of R1 at 2955 would go a long way to establishing what this market really thinks, as bumbling around in the Y ratio like it has been, doesn’t mean anything, well apart from a large degree of apathy.