SPX , NDX & DJX Ratio Table 3rd August 2018
The SPX has finished the leap we caught mid-air in our last comment as the zone has now landed at 2795-2805.
All that remains to be seen is if this is just a very drawn out reaction to where it should have been since the last expiry, and if so, it is a move that hardly inspires confidence it is so begrudging, or something that may continue.
And to be honest it does look like a “if I must” kind of reaction, as the ratios below the zone, although better in places, have hardly taken advantage, and furthermore those above the zone are static.
We have seen a test of R1 here with the high of 2848.03 last week, and yesterday’s capitulation at Y2, high 2829.91, is the opposite of aggressive, so unless one or both of the other two have an axe to grind all we can see at present is this index whipsawing around in the Y ratio bandwidth.
Range: 2805 to 2850
Type: On balance only just bearish
The NDX last Friday went below its zone but managed to claw itself back into it by the close, finishing at 7296.76.
Then came Monday, and it having already broken down below the zones bottom boundary it was hardly going to be as steadfast as July’s, and once into the Y1 ratio there was literally no support.
So, on the Tuesday, when it rallied it was a big moment with the high of 7272.96, as it failed to break back into its zone.
This made Wednesday absolutely critical, for the bulls at least, and they failed to do it on the gap up at the open, only getting as high as 7269.20, and the close was 7272.89, so it was trying, but no doubt about it the bulls were having to fight tremendously hard just to keep near their zone.
Thursday saw the bulls backing themselves, but as we have pointed out above, they are in a bigger fight then they perhaps realise.
So, all to play for here, and lots of minimal Y1 to do it in, so basically more of the same until this bandwidth starts to narrow, if it does.
Range: 7325 to 7475
Activity: Very good
From a ratio stance the DJX certainly doesn’t have an axe to grind (see SPX comment) and if anything, they have already gone on holiday.
The ratios have changed below the zone, which will remain to be seen how significant this may be, but we now have a lot more Y ratio and the total loss of R3.
Currently what seems to be the problem is the top of the zone and their complete inability to break out through it.
The first three days of this week saw highs of 25500, 25490 and 25488, but it was not just this as none of the other two at these points were hitting meaningful ratio resistance so this roadblock is entirely their own.
Interestingly, there didn’t even seem to be any enthusiasm for leap-frogging opening gambits.
If anything, activity is symptomatic of money coming off the table, which is generally not a bullish sign when we are only half way through the expiry.
Range: 24500 to 25500