Nb. Our comment from the 07/07/20
Just like London across the pond, here in the SPX it has been all about Y2 as well.
We used to publish daily, and before the market opened, so everyone who took note would know well in advance where the potential speedbumps were.
Back on the 30th June we published Y2 as being at 3155, above the zone, and by Thursday 2nd July, this had not changed.
The intraday high that day was 3165.81, which in truth doesn’t do the battle at 3155 justice, and resulted in the eventual close at 3130.01.
On Monday 6th Y2 slipped to 3180, so we were hardly surprised to see the intraday high of 3182.59, but the recovery towards the close at 3179.72, showed exactly what their intentions are today.
Normally, this would mean, a gap up at the open, to try to leapfrog this particular hurdle.
Ironically, this would not have been necessary, as today, Y2 has slipped further, to 3195.
So, with the market opening easier, this was a lot of unnecessary effort, as it leaves them with it still all to do.
And it is not just Y2 that has slipped above the zone, with both R1 and R2 moving out, giving this market plenty of leeway above it.
Furthermore, the potential for the zone to move up, to 3095-3105, is back on again.
At the end of the day, Y2 should not be that great an impediment, and in truth, the Y ratios are so low they are really only calculated to reveal early signs of directionality, they are so minimal, so bear this sensitivity in mind, as this index still resides towards the top of a 360-point Y ratio bandwidth.
Other than that, it is all looking good, but very thin.
Range: 2895 to 3255
Type: On balance bearish
Nb. Our comment for 07/10/20
It certainly has been an odd expiry thus far in the SPX.
The zone has been static so far, and at the start of this expiry this index dropped 100-points to go down and visit it.
At the start, Y2 was at 3205, but by the end of June, it had dropped to 3155.
On the 2nd July the intraday high was 3165.81, before it closed at 3130.01, which also served to reverse Y2’s move, as it moved back out to 3180.
This is what caught this index on the 6th July, when the intraday high was 3182.59, and the close was 3179.72.
On the 7th Y2 had moved to 3195, and as you can see in the above table, today it is back to where it started the expiry, 3205.
Sometimes it is worth knowing what has happened, as it always helps to get a feel for where any index is.
The fact that the moves are so small, when all it has to contend with is the very minimal Y1 ratio, shows a total lack of interest and desire, on top of, or resulting in, its increased sensitivity.
Which brings us around to next week, as it is the rollover and expiry, which should get a bit of activity back into this market.
We are expecting the zone to move to 2995-3005, or 3145-3155, so it is where it needs to be for next week already.
However, once a bit of activity kicks-in, then it is still in a 330-point Y ratio bandwidth, so things should start to get exciting.
If history is anything to go by, 3% daily moves would be perfectly normal, as would whipsaw, so brace yourselves and keep those stops tight.
Range: 2940 to 3270
Activity: Very poor