Category: Uncategorized

Jan
19
2021
January 19th, 2021 by Richard

Distinct lack of ratio in the SPX Feb expiry.

 

Nb. Our comment from the 01/15/21 (Not published)

 

Nb. Our comment for 01/19/21

 

After a flash of aggression in the Jan expiry, in the end, it was all a bit of a damp squib, having chosen the target of 3795-3805 from as early as the Monday.

Then you have the rollover from an intermediary to an intermediary expiry, which are always low, so probably a good thing they are the least usual.

Then, to compound it all, this expiry is a five-week one, which are themselves notorious for being slow out of the gate.

The holiday on Monday won’t have helped either.

So, having said all that, the way the pathetic amount of ratio, that is around currently, is aligned, then there is potential for some huge moves.

The Y1 ratio bandwidth it is in above the zone is a massive 150-points wide in itself, for example.

The entire Y1 ratio bandwidth is 285-points, and the overall Y ratio bandwidth is a difficult to imagine 585-points wide.

On top of which, literally and metaphorically, is R1, all alone and not really that imposing to a market with a decent breeze in its sails.

Don’t forget, in the January expiry, Y2 played quite a role.

However, we won’t know how potent it will be this trip until it gets tested.

In the meantime, there is so much scope here, it could easily ping around anywhere and everywhere.

We used to use the ice-rink analogy a lot where the NDX was concerned, but is just as equally appropriate here under these circumstances, as a just the smallest bit of momentum could go a very long way.

 

Range:            3705  to  3855           

Activity:          Good

Type:              On balance only just bearish

 

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Posted in Uncategorized

Jan
18
2021
January 18th, 2021 by Richard

Critical level v. early this expiry for the FTSE

 

Nb. Our comment from the 01/11/21 (Nb. The January Expiry comment)

 

Wowee, is about all we can say.

As you can see from our last comment (above) we fully expected, or perhaps suspected would be more appropriate, that the FTSE had R2 at 6650 in its sights, and this time wasn’t going to take no for an answer.

The momentum also took it straight past R3 at 6700, meaning DR was the next stop.

The intraday high of 6859.14, and the close at 6841.86, pretty much sums it up.

One of the peculiarities of the FTSE, and the NDX is similar, is that in a 100-constituent index certain stocks, or sectors, carry a disproportionate weighting, and if they get the wind in their sails, there is not much that can stand in the way.

However, this momentum tends to be relatively short-lived, and the expiry just carries on, at least to its expiry, which in this case, is this week.

We have seen the zone move, which we flagged back on the 21st and 31st Dec.

But more importantly, and continuing what we saw in our previous comment, activity has been high, coming in again at “good” on our scale, and significantly, has been “bearish”.

With no qualifier in front, as in “on balance”, this means that calls have been taken off the table while puts have been added.

This still leaves it lop-sided, but from 267.6% to now “just” 166.5%, is a huge improvement, but still top heavy nevertheless, so with the rollover and expiry this week it is going to have to go some to just hang on to these hard-fought gains.

Guessing on how things might turn out, based on a lot of expiry end-games, getting this market below 6750 will be an impressive achievement for derivatives.

Needless to say, this makes 6850 the new, or still, crucial level to watch out for.

 

Range:            6850  to  6950       

Activity:          Good

Type:              Bearish

 

Nb. Our comment on 01/18/21

 

We don’t normally include our last comment (from the Jan expiry) but this time we are making an exception, basically because it’s worth noting what we said “Guessing on how things might turn out, based on a lot of expiry end-games, getting this market below 6750 will be an impressive achievement for derivatives” and the fact that the EDSP was 6767.92.

Also, in another break from the norm, in the table above we have included last year’s Feb expiry ratio table.

Not for nostalgia purposes, for those that remember the market north of 7000, but to highlight how unusual today’s table is.

Although they both do have one striking similarity, which is that they are both top-heavy, or as we have been saying recently, lop-sided.

For those that remember how aggressive the last expiry was, with the FTSE taking on DR, and how critical 6850 became, then the big question is whether or not this attitude will persist in the Feb expiry.

It is always very difficult to strip out how much of Friday’s price action was down to the Jan expiry, so it is therefore virtually impossible to tell whether or not the bounce up from the intraday low of 6676.55 to a close that is above R1 in this expiry, is a continuation of this aggression.

This makes 6700 a very critical level in this expiry, as if the market is happy to trade within this R1 ratio bandwidth, then it has a lot of room to manoeuvre in.

But, take good note, that again 6850 is a big level, and this time it also jumps an entire ratio, leapfrogging R2 and going straight to R3, which will come as a very nasty surprise should the market go there again.

However, below 6700, lurks a very scary 500-point Y ratio bandwidth.

One thing for certain, is it is highly unlikely that this new trip will be dull.

 

Range:            6700  to  6850       

Activity:          Average

Type:              Bearish

 

Available to buy now

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Posted in Uncategorized

Jan
13
2021
January 13th, 2021 by Richard

Quiet rollover for the SPX, so far at least.

 

Nb. Our comment from the 01/08/21

 

And there we have it, the first test of a R ratio this expiry.

Which is very surprising, as the SPX is seldom this timid.

It is therefore a good idea to remind everyone exactly how much difficulty this index had with coping with just Y2 ratio, first at 3705 in the first week, then 3730/3745 in the second, and until yesterday, the current level at 3755.

So, what wasn’t a surprise, was the fact that this index camped out just below where R1 was yesterday, 3805.

If you knew it was there, then you understood what was happening, namely the market reaction to the dynamic delta.

The fact it has slipped a bit today has been coming, as we have persistently mentioned that the ratios above the zone have been falling, albeit “pedantically”.

Furthermore, in our last comment (above) we said it had “zeroed the clock”, so when it closed that day above 3705, this should have told you the bulls were back in charge, and an attack on R1 was more than likely.

What happens now is the big question, and as you can see in the above table R1 has slipped to 3815.

By Monday this in all likelihood will become 3830.

But, for a market that struggled against the lowly Y2, from 3805 up to 3830 is what we would now refer to as a step-up, so could easily still cause some reluctance among the bulls.

On top of this, we are already about to enter the rollover and expiry, so the zone should start to exert a gravitational pull, which is not to say it can’t or won’t move again, but we can’t see it get higher than 3745-3755 as things stand.

It wouldn’t be the first time this index just kept battering away on a retreating R ratio door, tediously repetitive in fact, but please don’t lose sight of that ginormous Y ratio bandwidth below this market, as that should scare even the most hardened bull.

 

Range:            3705  to  3815           

Activity:          Moderate

Type:              On balance bearish

 

Nb. Our comment for 01/13/21

 

Well, it hasn’t exactly been a case of the “tediously repetitive” as it hasn’t really been battering away at anything.

It started aggressively, last Friday, with the open of 3815.05, which was bang on our R1 level.

Again, no surprise at the coincidence.

And, as we said above, the R ratios were slipping, so we were anticipating R1 to be 3830 come the Monday.

As it happens, on the 11th, R1 was in fact 3840, so it could have been a lot more aggressive, successfully so for the bulls, than it was.

Our mistake was in not identifying that Y2 was going to slip, thereby opening up a potential move in the zone above the 3745-3755 we had been expecting.

In our defence, we suspect it has been a combination of the ratios eventually adjusting either side of the existing zone, and, probably more pertinently, the market deciding, amazingly early for an expiry, on Monday, that 3795-3805 would be a nice place to end this trip at.

Of course, we don’t know why, but the lack of any enthusiasm from the bulls to push home their advantage is a major contributing factor.

As would be the apparent lack of any bears.

So, bit of a default expiry from what we can make out.

This is borne out by the fact, that despite the R ratio rising below, the fact it has slipped above, means that the Y ratio bandwidth remains exactly the same, at 410-points.

All bit of an anti-climax really, but don’t drop your guard just yet, as normally, with so much minimal Y ratio around, volatility isn’t far behind, so the potential still very much exists for 3% moves, that may or may not include whipsaws.

 

Range:            3705  to  3855           

Activity:          Poor

Type:              Bearish

 

Available to buy now

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Posted in Uncategorized

Jan
11
2021
January 11th, 2021 by Richard

6850 is the new level towatch in the FTSE.

 

Nb. Our comment from the 01/06/21

 

The closing auction yesterday was, or could turn out to be, a very significant point in this expiry.

But before we get into that we must mention Monday, as it was only the previous trading day that we commented that the only difference now was that this market now knew where R2 was hiding (please see above).

And, post Brexit agreement, it didn’t disappoint, and blasted out of the starting blocks, jumping just over 200-points.

The trouble was, this took it straight back to R2, with the intraday high of 6662.66.

Obviously, it hadn’t got used to the dynamic delta created by R2, but also, it was not really ready to capitulate either, which resulted in the FTSE trading just below 6650 for about the next 7 hours, until it eventually gave up in the final hour of trading.

Fast forward to yesterday’s closing auction, when the market managed to add about 13-points onto the real time close of 6599.60.

Now, the significance is that the ratios have changed, and 6600 is now the demarcation line between Y1 and the R ratios, so staying above it could prove crucial.

Below it is minimal ratio, and the zone (zero ratio), or to look at it another way, 250-points or almost 4%.

Dead ahead is R2, again, but this time it would be strike three, so if it goes there again, it should go “packing”, so there is a glimmer for the bulls, and after the effort of the auction, very possibly the desire.

But, and so typical of markets, any susceptibility to a scare, and if that forces it below 6600, then that’s an awful lot of emptiness waiting for it.

Great trading possibilities though…

 

Range:            6450  to  6600        or        6600  to  6650 (6700)       

Activity:          Good

Type:              Bearish

 

 

Nb. Our comment on 01/11/21

 

Wowee, is about all we can say.

As you can see from our last comment (above) we fully expected, or perhaps suspected would be more appropriate, that the FTSE had R2 at 6650 in its sights, and this time wasn’t going to take no for an answer.

The momentum also took it straight past R3 at 6700, meaning DR was the next stop.

The intraday high of 6859.14, and the close at 6841.86, pretty much sums it up.

One of the peculiarities of the FTSE, and the NDX is similar, is that in a 100-constituent index certain stocks, or sectors, carry a disproportionate weighting, and if they get the wind in their sails, there is not much that can stand in the way.

However, this momentum tends to be relatively short-lived, and the expiry just carries on, at least to its expiry, which in this case, is this week.

We have seen the zone move, which we flagged back on the 21st and 31st Dec.

But more importantly, and continuing what we saw in our previous comment, activity has been high, coming in again at “good” on our scale, and significantly, has been “bearish”.

With no qualifier in front, as in “on balance”, this means that calls have been taken off the table while puts have been added.

This still leaves it lop-sided, but from 267.6% to now “just” 166.5%, is a huge improvement, but still top heavy nevertheless, so with the rollover and expiry this week it is going to have to go some to just hang on to these hard-fought gains.

Guessing on how things might turn out, based on a lot of expiry end-games, getting this market below 6750 will be an impressive achievement for derivatives.

Needless to say, this makes 6850 the new, or still, crucial level to watch out for.

 

Range:            6850  to  6950       

Activity:          Good

Type:              Bearish

 

 

Available to buy now

The faction account of the Big Bang, The Great Storm and the market crash of 1987, available in eBook and paperback here, a must read if you don’t believe in history repeating itself.

Posted in Uncategorized

Jan
08
2021
January 8th, 2021 by Richard

R1 stops the SPX dead.

 

Nb. Our comment from the 01/05/21

 

It is a shame we can’t also include what we said the time before above, as our comment from the 23rd December may well be as pertinent today as they were back then.

Essentially, we have got the move in the zone, as anticipated.

And, yet again, in one of those coincidences that happen far too often, the market finishes as close to the middle of it as is practically possible.

Which actually means, a new year and now, a fresh start.

As in, it moved into its zone just as its zone moved there, so it has zeroed the clock to all intents and purposes.

Which brings us round to our comment before last, which basically pointed out that should the zone move before the market rose, the market could find itself by default in bear territory, or in our definition, below its zone.

This is a serious position, as the entire dynamic changes when the bears rather than the bulls are in charge, and for any market participants this should be worth knowing.

Now being in its zone, this index has a totally free choice now. Bulls equals above 3705, bears in charge, below 3695, simple stuff.

But worth bearing in mind, very few will have known the zone has moved (or perhaps the significance of this) so over the next day or so it will be a journey of discovery, not design.

But before you get all gloom and doom, don’t forget a rising zone is bullish (although this is now just where the Dec expiry ended), as is rising ratios below, which is perhaps not so evident in the tables, but there is definitely a groundswell going on.

Also bullish is falling ratios above, which is true, but very pedantically, so certainly not convincing.

Finally, and although this index has been surprisingly sensitive to just Y2 ratio so far this expiry, even this bandwidth stretches for 260-points, and, so far, the only tests of it have been above the zone.

 

Range:            3695  to  3705        nb.Y2 to Y2 is 3495  to  3755           

Activity:          Very poor

Type:              Bearish

 

 

Nb. Our comment for 01/08/21

 

And there we have it, the first test of a R ratio this expiry.

Which is very surprising, as the SPX is seldom this timid.

It is therefore a good idea to remind everyone exactly how much difficulty this index had with coping with just Y2 ratio, first at 3705 in the first week, then 3730/3745 in the second, and until yesterday, the current level at 3755.

So, what wasn’t a surprise, was the fact that this index camped out just below where R1 was yesterday, 3805.

If you knew it was there, then you understood what was happening, namely the market reaction to the dynamic delta.

The fact it has slipped a bit today has been coming, as we have persistently mentioned that the ratios above the zone have been falling, albeit “pedantically”.

Furthermore, in our last comment (above) we said it had “zeroed the clock”, so when it closed that day above 3705, this should have told you the bulls were back in charge, and an attack on R1 was more than likely.

What happens now is the big question, and as you can see in the above table R1 has slipped to 3815.

By Monday this in all likelihood will become 3830.

But, for a market that struggled against the lowly Y2, from 3805 up to 3830 is what we would now refer to as a step-up, so could easily still cause some reluctance among the bulls.

On top of this, we are already about to enter the rollover and expiry, so the zone should start to exert a gravitational pull, which is not to say it can’t or won’t move again, but we can’t see it get higher than 3745-3755 as things stand.

It wouldn’t be the first time this index just kept battering away on a retreating R ratio door, tediously repetitive in fact, but please don’t lose sight of that ginormous Y ratio bandwidth below this market, as that should scare even the most hardened bull.

 

Range:            3705  to  3815           

Activity:          Moderate

Type:              On balance bearish

 

Available to buy now

The faction account of the Big Bang, The Great Storm and the market crash of 1987, available in eBook and paperback here, a must read if you don’t believe in history repeating itself.

Posted in Uncategorized

Jan
06
2021
January 6th, 2021 by Richard

FTSE Ratio changes now make 6600 critical.

 

Nb. Our comment from the 12/31/20

 

Such a shame really, as it was obvious the FTSE really wanted to go better, and that was before the Brexit announcement.

Monday and Tuesday last week saw this market drop into and then be contained by its zone, which was pretty much what we were hoping for in our last comment written before the week started.

However, the last two trading days of last week, saw the FTSE break out back above its zone.

Evidently in anticipation of a deal, which duly came and set the tone for the resumption of trading on Tuesday.

So, the immediate response was a very healthy jump, the trouble was, is that this jump propelled it right bang smack into the middle of our R ratios.

If you had seen our previous comment then at least you were forewarned, unlike the market, which was very obviously caught by surprise with the futures selling generated by R2 ratio dynamic delta from 6650 and above.

The fact that just one day later this index is now back to Y2 just goes to show how little it was prepared to take on those futures, or at least, so far.

It is now at a pivotal point, a decision moment if you prefer, as we still expect to see the zone here move to 6450-6550.

This means, should this happen, that 6550 is the critical level.

Below it, and it should be safely in its new zone, but, above it, and it has exponentially increasing R ratios every 50-points.

The only difference being, is that the market now knows what’s waiting for it up there.

 

Range:            6450  to  6600       

Activity:          Poor

Type:              On balance bullish

 

 

Nb. Our comment on 01/06/21

 

The closing auction yesterday was, or could turn out to be, a very significant point in this expiry.

But before we get into that we must mention Monday, as it was only the previous trading day that we commented that the only difference now was that this market now knew where R2 was hiding (please see above).

And, post Brexit agreement, it didn’t disappoint, and blasted out of the starting blocks, jumping just over 200-points.

The trouble was, this took it straight back to R2, with the intraday high of 6662.66.

Obviously, it hadn’t got used to the dynamic delta created by R2, but also, it was not really ready to capitulate either, which resulted in the FTSE trading just below 6650 for about the next 7 hours, until it eventually gave up in the final hour of trading.

Fast forward to yesterday’s closing auction, when the market managed to add about 13-points onto the real time close of 6599.60.

Now, the significance is that the ratios have changed, and 6600 is now the demarcation line between Y1 and the R ratios, so staying above it could prove crucial.

Below it is minimal ratio, and the zone (zero ratio), or to look at it another way, 250-points or almost 4%.

Dead ahead is R2, again, but this time it would be strike three, so if it goes there again, it should go “packing”, so there is a glimmer for the bulls, and after the effort of the auction, very possibly the desire.

But, and so typical of markets, any susceptibility to a scare, and if that forces it below 6600, then that’s an awful lot of emptiness waiting for it.

Great trading possibilities though…

 

Range:            6450  to  6600        or        6600  to  6650 (6700)       

Activity:          Good

Type:              Bearish

 

Available to buy now

The faction account of the Big Bang, The Great Storm and the market crash of 1987, available in eBook and paperback here, a must read if you don’t believe in history repeating itself.

Posted in Uncategorized

Jan
05
2021
January 5th, 2021 by Richard

New Year, new zone, SPX ends in the middle of it.

 

Nb. Our comment from the 12/30/20

 

We hope you all had a happy and safe holiday.

Looks like the SPX did, and is right on course for a very good year-end performance based bumper bonus.

However, a word of caution, that although we see the recent rally as “performance enhancing” it hasn’t really had any great hurdle to overcome in achieving such, so don’t expect an adverse reaction immediately the clock ticks past midnight.

By which we mean, it hasn’t been tangling with the R ratios.

Which is a good thing, as all last week it was about Y2 at 3705, and those that were aware of this level will know how much of a nuisance it was on a daily basis.

Most days it essentially caused the market to flatline about it.

So, for the bulls, it’s probably a good thing it has eventually shifted.

The very interesting aspect is that yesterday this market closed just below it, so perhaps this fight is not yet over.

However, now it is in retreat, it would be remiss of us not to mention the next step-up levels, being 3745 and 3755.

A couple of other housekeeping points; Firstly, the zone hasn’t shifted, but it is still very likely to move to 3695-3705 sooner rather than later.

Secondly, when it does, as things stand, it will still be below the market, so this means the market would remain in bullish territory.

Thirdly, the R ratios below the zone have at last started to creep north.

This has narrowed the Y ratio bandwidth to “just” 410-points, but worth noting, that this market is now a lot closer to the top end of this range than when we last commented.

Final point, and worth noting, that when we come back in ’21 this expiry will only have two more weeks to run, or a week, then it’s into the rollover and expiry. Fun, fun, fun.

 

Range:            3655  to  3730 (3805)         

Activity:          Poor

Type:              Neutral

 

 

Nb. Our comment for 01/05/21

 

It is a shame we can’t also include what we said the time before above, as our comment from the 23rd December may well be as pertinent today as they were back then.

Essentially, we have got the move in the zone, as anticipated.

And, yet again, in one of those coincidences that happen far too often, the market finishes as close to the middle of it as is practically possible.

Which actually means, a new year and now, a fresh start.

As in, it moved into its zone just as its zone moved there, so it has zeroed the clock to all intents and purposes.

Which brings us round to our comment before last, which basically pointed out that should the zone move before the market rose, the market could find itself by default in bear territory, or in our definition, below its zone.

This is a serious position, as the entire dynamic changes when the bears rather than the bulls are in charge, and for any market participants this should be worth knowing.

Now being in its zone, this index has a totally free choice now. Bulls equals above 3705, bears in charge, below 3695, simple stuff.

But worth bearing in mind, very few will have known the zone has moved (or perhaps the significance of this) so over the next day or so it will be a journey of discovery, not design.

But before you get all gloom and doom, don’t forget a rising zone is bullish (although this is now just where the Dec expiry ended), as is rising ratios below, which is perhaps not so evident in the tables, but there is definitely a groundswell going on.

Also bullish is falling ratios above, which is true, but very pedantically, so certainly not convincing.

Finally, and although this index has been surprisingly sensitive to just Y2 ratio so far this expiry, even this bandwidth stretches for 260-points, and, so far, the only tests of it have been above the zone.

 

Range:            3695  to  3705        nb.Y2 to Y2 is 3495  to  3755           

Activity:          Very poor

Type:              Bearish

 

Available to buy now

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Dec
31
2020
December 31st, 2020 by Richard

Time to decide for the FTSE.

 

Nb. Our comment from the 12/21/20

 

Now the mighty Dec expiry is over, the stark reality of 2021 looms large.

Of course, there is still a shortened week to go for everyone to secure their year-end performance-based fees/bonus’s and the such-like, so this has to be got out of the way first.

Or at least, this has been the case in almost every year we can remember.

This also means the picture painted by the above table could, and probably will change.

But, as it stands, and just one glance should be enough to tell you, that this is not a pretty one.

Every 50-points from 6600 it goes up an exponential ratio level, so if it wants to go higher them’s some serious headwinds, particularly for a January.

Below the zone there is virtually no significant ratio, especially compared to what there is above, which essentially means, no safety net at all.

A saving grace is that we think the zone will move to 6450-6550.

But for us, the best-case scenario, is that this market settles within it, and hopefully just stays there nice and quietly.

Also, don’t get fooled by the level of activity, as when the puddle is so small even a raindrop looks big.

Basically, the world and his brother are all just looking one-way, which seldom ends well for them.

 

Range:            6450  to  6600       

Activity:          Very good

Type:              Bullish

 

 

 Nb. Our comment on 12/31/20

 

Such a shame really, as it was obvious the FTSE really wanted to go better, and that was before the Brexit announcement.

Monday and Tuesday last week saw this market drop into and then be contained by its zone, which was pretty much what we were hoping for in our last comment written before the week started.

However, the last two trading days of last week, saw the FTSE break out back above its zone.

Evidently in anticipation of a deal, which duly came and set the tone for the resumption of trading on Tuesday.

So, the immediate response was a very healthy jump, the trouble was, is that this jump propelled it right bang smack into the middle of our R ratios.

If you had seen our previous comment then at least you were forewarned, unlike the market, which was very obviously caught by surprise with the futures selling generated by R2 ratio dynamic delta from 6650 and above.

The fact that just one day later this index is now back to Y2 just goes to show how little it was prepared to take on those futures, or at least, so far.

It is now at a pivotal point, a decision moment if you prefer, as we still expect to see the zone here move to 6450-6550.

This means, should this happen, that 6550 is the critical level.

Below it, and it should be safely in its new zone, but, above it, and it has exponentially increasing R ratios every 50-points.

The only difference being, is that the market now knows what’s waiting for it up there.

 

Range:            6450  to  6600       

Activity:          Poor

Type:              On balance bullish

 

Available to buy now

The faction account of the Big Bang, The Great Storm and the market crash of 1987, available in eBook and paperback here, a must read if you don’t believe in history repeating itself.

Posted in Uncategorized

Dec
30
2020
December 30th, 2020 by Richard

The SPX is still struggling against just Y2.

 

Nb. Our comment from the 12/23/20

 

Although we did not publish back on the 18th, and anyway, it was still the December expiry, we did calculate the ratios, and have therefore included them in the above table so you can discern the evolution from then to today.

And, just like the FTSE, it is a shame that we didn’t publish this month’s before it became the front month on Monday, as that was the day it all happened.

The intraday low came at the end of a 66.42-point drop to 3636.48, and we are not too worried about a bit of overshoot under the circumstance, so this was most definitely a test of the bottom boundary of its zone.

And we are more than happy to call the intraday high that day of 3702.90 a test of Y2.

A bandwidth test on the first day is going some, and because of this we are not too sure it even knew that it was.

Despite this exciting start there are still some points to note.

Firstly, at least we have some strength and movement in the ratios below the zone.

Secondly, we would expect Jan’s zone to join where Dec ended, 3695-3705.

Thirdly, a little bit of strength in the ratios above the zone, despite the two points below, so significantly no weakening, or at least as yet.

Fourthly, the Y ratio bandwidth is a colossal 460-points wide.

Fifthly, at the moment the market is in bullish territory (above its zone) but a lot may well rest on where it is when the zone does move.

Sixthly, the year-end performance bonus season is not yet over.

Finally, it is thin out there, typical for a Jan expiry, but with all that Y ratio around that’s a 12.5% range of minimal ratio, so, literally, anything could/can happen.

 

Range:            3655  to  3705 (3805)         

Activity:          Moderate

Type:              On balance only just bearish

 

 

 

Nb. Our comment for 12/30/20

 

We hope you all had a happy and safe holiday.

Looks like the SPX did, and is right on course for a very good year-end performance based bumper bonus.

However, a word of caution, that although we see the recent rally as “performance enhancing” it hasn’t really had any great hurdle to overcome in achieving such, so don’t expect an adverse reaction immediately the clock ticks past midnight.

By which we mean, it hasn’t been tangling with the R ratios.

Which is a good thing, as all last week it was about Y2 at 3705, and those that were aware of this level will know how much of a nuisance it was on a daily basis.

Most days it essentially caused the market to flatline about it.

So, for the bulls, it’s probably a good thing it has eventually shifted.

The very interesting aspect is that yesterday this market closed just below it, so perhaps this fight is not yet over.

However, now it is in retreat, it would be remiss of us not to mention the next step-up levels, being 3745 and 3755.

A couple of other housekeeping points; Firstly, the zone hasn’t shifted, but it is still very likely to move to 3695-3705 sooner rather than later.

Secondly, when it does, as things stand, it will still be below the market, so this means the market would remain in bullish territory.

Thirdly, the R ratios below the zone have at last started to creep north.

This has narrowed the Y ratio bandwidth to “just” 410-points, but worth noting, that this market is now a lot closer to the top end of this range than when we last commented.

Final point, and worth noting, that when we come back in ’21 this expiry will only have two more weeks to run, or a week, then it’s into the rollover and expiry. Fun, fun, fun.

 

Range:            3655  to  3730 (3805)         

Activity:          Poor

Type:              Neutral

 

Available to buy now

The faction account of the Big Bang, The Great Storm and the market crash of 1987, available in eBook and paperback here, a must read if you don’t believe in history repeating itself.

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Dec
23
2020
December 23rd, 2020 by Richard

Exciting start to the Jan expiry for the SPX

 

Nb. Our comment from the 12/18/20 (Not published)

 

Nb. Our comment for 12/23/20

 

Although we did not publish back on the 18th, and anyway, it was still the December expiry, we did calculate the ratios, and have therefore included them in the above table so you can discern the evolution from then to today.

And, just like the FTSE, it is a shame that we didn’t publish this month’s before it became the front month on Monday, as that was the day it all happened.

The intraday low came at the end of a 66.42-point drop to 3636.48, and we are not too worried about a bit of overshoot under the circumstance, so this was most definitely a test of the bottom boundary of its zone.

And we are more than happy to call the intraday high that day of 3702.90 a test of Y2.

A bandwidth test on the first day is going some, and because of this we are not too sure it even knew that it was.

Despite this exciting start there are still some points to note.

Firstly, at least we have some strength and movement in the ratios below the zone.

Secondly, we would expect Jan’s zone to join where Dec ended, 3695-3705.

Thirdly, a little bit of strength in the ratios above the zone, despite the two points below, so significantly no weakening, or at least as yet.

Fourthly, the Y ratio bandwidth is a colossal 460-points wide.

Fifthly, at the moment the market is in bullish territory (above its zone) but a lot may well rest on where it is when the zone does move.

Sixthly, the year-end performance bonus season is not yet over.

Finally, it is thin out there, typical for a Jan expiry, but with all that Y ratio around that’s a 12.5% range of minimal ratio, so, literally, anything could/can happen.

 

Range:            3655  to  3705 (3805)         

Activity:          Moderate

Type:              On balance only just bearish

 

Available to buy now

The faction account of the Big Bang, The Great Storm and the market crash of 1987, available in eBook and paperback here, a must read if you don’t believe in history repeating itself.

Posted in Uncategorized

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