SPX never left its R1 Ratio bandwidth all expiry, ouch.

Nb. Our comment from 01/14/19

The zone has indeed moved up again, and to exactly where we expected it to.

Likewise, the market has just “continued to knock on the retreating ratio door”.

However, now there are different factors added to the mix, being the rollover and expiry.

Therefore, we must point out that the upward move in the zone may not be over, as there is a distinct possibility of it moving to 3220-3230.

There is also an outside chance of seeing 3245-3255.

Either way, for us to see a conventional expiry, we need to see a pullback of at least 30-points, and quite possibly 50-points by the end of this week.

But, apart from the fact it’s the end game for this expiry, it’s all rather bullish, what with the rising zone and the ratios rising and falling either side of it.

Nevertheless, it has hardly been emphatic, and the risks remain, as that Y ratio bandwidth is still a staggering 180-points wide, so still very susceptible to a scare in our view.

It has done exceptionally well to avoid, or nullify, any bears out there, but it is never good when any market has blinkers on, and therefore only sees and hears what it wants to.

Needless to say, 3280 is now the critical level.

Range:            3280  to  3305         

Activity:          Average     

Type:              On balance bearish

Nb. Our comment on 01/17/20

The bulls never even glanced back.

In fact, on the day of our last comment the markets intraday low was 3277.19, a direct challenge of the bottom boundary of the R1 ratio bandwidth it was in, and so, naturally, the bottom of our trading range.

So, when the close was 3283.18 the writing was on the wall.

The ratios have continued to build below the zone, and retreat above it, so much so it has created a vacuum into which the zone has risen.

The end result is the zone finishing at 3270-3280, still quite some way behind the settlement price of 3326.19.

This means it stayed in its R1 ratio bandwidth right to the very end.

So, a miss, and a costly one, but being R1 not too punitive, but certainly enough to smart.

However, it is the nature of the miss, as it never visited its zone once during the entire expiry, and that is bad news.

In fact, we would go as far as to say, unnatural.

When markets get this blinkered, and this one-sided, there is only ever one outcome.

The only question is when?

As, this sense of invulnerability can last for quite a while, it may well take a triple witching expiry to force some sense back into it, and the next biggie is not until March.

Range:            3310  to  3335          

Activity:          Average      

Type:              On balance bearish