SPX Ratio Table update, and still lots of Y ratio around.
Nb. Our comment from 06/05/19
What another titanic battle with R2 for the SPX again.
As we said, “Even more significant, is the fact that R2 has receded to 2745” and “if thebulls do regain control, they have an awful lot of space to express themselves in”, so we sincerely hope you took note.
Between the SPX and the FTSE, we have just witnessed two rather epic ratio inspired support battles, and the good news is, there is still two more weeks of this expiry to go.
The new ratio table is above, and the two aspects to note are that R1 below the zone has slipped to 2770, and R3 to 2695.
The fact that R2 hasn’t moved doesn’t mean it is not weakened, just that it is now at the lower end of R2 rather than the higher end.
Therefore, the ratios are obviously continuing to weaken below the zone, which is bearish, with the saving grace being that the zone itself hasn’t moved.
This, may not be the case for long, unless the bulls really do establish a rally, as the weakness in the ratios below the zone could now easily precipitate a move for it to 2820-2830.
More to the point, the longer the market stays below its zone, the more likely that this could just be the first step.
At the end of the day, fantastic bounce off R2, but it is still in the middle of an enormous Y ratio bandwidth, so nothing resolved yet.
And, if anything, perhaps a sign of things to come, as 2% or 3% daily moves in these conditions are actually only to be expected.
Range: 2770 to 2845
Type: On balance just fractionally bearish
Nb. Our comment on 06/12/19
You have just got to love these expiries with so much Y ratio in them, even if they are triples.
From the close at 2744.45 on Monday 3rd, right on R2, this market has just pinged all the way up to Y2 at 2905.
What a ride.
A ride you should have expected and hopefully been on.
The worry is that one shouldn’t forget the bears were out in force, as evidenced by the titanic battle this index had with the R2 support level, and it didn’t take much resistance to encourage them.
In fact, all it took was Y2, the first level of resistance, and not a particularly big one at that, but it nevertheless resulted in a 25-point reverse.
The fact that this market hasn’t encountered a R ratio above the zone means we can’t wholeheartedly say the bears are back on top.
However, being in such a huge Y ratio bandwidth, the only thing we can say for certain is that it will be volatile.
And, with the rollover next week the market will need no more encouragement than that to get a head of steam up, so buckle up as this expiry could just be getting going.