At the start of this week the intraday
high on Monday was 2869.40, so we suspect the hitherto unchanged R2 was still
However, that day the market closed at
2867.19, which is a fairly blatant sign that either the market had breached R2,
or, and more likely, that it had slipped.
Today, it is at 2885, and as yesterday’s
intraday high was 2885.25, it’s a fair assumption that it was here then.
Obviously, it is slipping, and this index
just keeps banging on that door until it opens and move back to the next line
It will probably hold in the morning,
but we would be rather more circumspect later on.
2895 is the next R2 line of resistance,
but 2905 is where it takes a big step-up.
But, don’t forget, next week is the
rollover and expiry AND it is a 4-day week.
And, more importantly, the zone is still
way down at 2795-2805, and is sandwiched in a sea of Y ratio, so if someone
says “boo” to this market, there is no support underneath for a very long way
However, as always, best to keep an eye on the DJX as they seem to be the ones happy to force the pace.
Type: On balance just bearish
Nb. Our comment on 12/04/19
Since our last comment on the 4th
it has indeed been all about R2, which back then was at 2885 as you can see in
the left-hand column in the above table.
Furthermore, exactly as we also said
back then (please see above comment), this ratio was slipping, so if you had
taken notice then all the price action in this index over the last week would
have been perfectly understandable.
The top of the DJX’s zone was 26500, and
their intraday high, and so far, expiry high, back on Friday 5th was
So, taking yesterdays close the DJX has
lost 344-points, whereas, here in the SPX, it is down just 4.92-points.
As we said “it just keeps banging on
that (R2) door” and we even mentioned 2995, so really you just can’t get better
What we did get wrong however, was that
the rollover and expiry wasn’t “next week” it is now next week.
But worth noting that R2 is now 2925,
but there is what we call a step-up at 2905, which was R2 in-between publications.
The SPX has laid out its stall, and we
believe it will still be sensitive to a still receding R2, so, for us, it all
now boils down to the DJX, and the top of its zone, and the NDX.
The fact that the rollover and expiry are large on the horizon also means this market is still very susceptible to anyone saying “boo”.