Category: Uncategorized

Oct
14
2020
October 14th, 2020 by Richard

From Y2 all the way up to R1, not quite perfect for the SPX, but we will take it.

 

Nb. Our comment from the 10/07/20

 

Please be our guest and check what we said last time, as rather than having to repeat it, this is why we include it in this comment.

The zone has moved, and to 3345-3355.

Also, this may not be the end of it, but early days yet.

The surprise was it has taken so long, as it has literally just moved today, despite the market “hovering in its vicinity” for so long.

The other aspect was what we said about Y2, then at 3405.

Of course, 3405 featured prominently this week, this being the demarcation line of a significant step-up in ratio, as much as moving from one Y ratio to another can be.

Although, we have pointed out previously, that this expiry is proving to be extremely sensitive, as it was Y2 it bounced up from when the market hit 3195 earlier on this expiry.

As Y2 is currently 3455, then in the last day or so it has also been slowly climbing to this level from the aforementioned 3405, and yesterday, for example, was 3430, which considering the intraday high was 3431.56, says a lot.

Perhaps, something else worth a cursory glance, is that the intraday low was 3354.54, or the top of the new zone.

The fact that the market is following a retreating Y2 ratio, is good news, as is the upwardly mobile zone, but when it is hitting Y2 and a piece of bad news comes out, then what happened yesterday is only to be expected.

Don’t lose sight of the fact that the Y ratio bandwidth in its entirety is still a gobsmacking 385-points.

The real issue is that the ratio movement is painstakingly slow, and we are now entering the end-game of this expiry, so it may well just run out of time.

The fact that both puts and calls saw money coming off the table, with still a week and a half to go, just sums up the lack of involvement, and hence its sensitivity, at present.

 

Range:            3355  to  3455         

Activity:          Very poor

Type:              On balance not bullish

 

 

Nb. Our comment for 10/14/20

 

The SPX has certainly started to get a bit more aggressive, but it has had so much scope, this is hardly earth-shattering news, as let’s face it, we are only talking about R1.

It seems an absolute age ago this index was bouncing up off Y2, way down there at 3195, but in reality, it was only in the first few days of this expiry.

Back then, Y2 went from 3195 all the way up to 3455, and please put your hand on your heart and then say that you expected this market to transverse that entire 260-point bandwidth during the course of this expiry, as we said was likely.

Although, to be fair, we did say that it was entirely possible, and normal, for a market to transverse the entire Y ratio bandwidth, which, as R1 to R1 then went from 3095 to 3555, was actually a staggering 460-points.

In the end it seems it covered Y2 to R1, but, and again, hand on heart, did you honestly see this coming as our table did, or has.

Funnily enough, as R1 above the zone had come in to 3505, about mid expiry, but since it has started to retreat, and yesterday was back to 3555.

Of course, today, it is 3570, but as it is the rollover, we think the test it made on Monday was enough, and now it is all about the expiry.

So, the big question, is where will the zone end up?

And, don’t forget, at the start of this expiry it was 3295-3305, so it has therefore already climbed 100-points.

Well, it could easily be 3495-3505, but we really don’t think it matters much anymore, especially under these unique conditions.

Normally, you would only see, almost at most, a 30-point Y1 ratio bandwidth, so the actual zone was far more significant, than now, when we have a 210-point Y1 ratio bandwidth.

For us, it is more about the overall picture now, and make no mistake, the risks are here now, in a mirror image of how it was back February.

The Y ratio bandwidth is still 375-points, or 10.7%, so don’t get fooled by the market “strength”, as its opposition is the absolutely feeble Y ratios.

If you are a bull, enjoy, but please don’t be fooled into believing there is any weight of actual money (buying) behind it.

 

Range:            3405  to  3570         

Activity:          Moderate

Type:              On balance only just bearish

 

 

Available to buy now

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Posted in Uncategorized

Oct
12
2020
October 12th, 2020 by Richard

After a titanic battle with 5950 the FTSE eventually achieves its zone.

 

Nb. Our comment from the 10/06/20

 

There has hardly been any change in the FTSE’s ratios, which is a really good thing, as you can see them in action without having to spot a moving target.

In fact, last week, you only had to remember two levels really, so not a big ask.

But, had you dome so, your timing should have been impeccable.

On the very day of our last note, 28th Sept, we mentioned the levels, if you hadn’t seen them in the table, and it was the zones bottom boundary that was the pertinent one.

The market stormed ahead straight from the off, but it wasn’t until early afternoon that it encountered 5950.

It had two more pops at it, roughly 40mins between each, before it gave up, and finished at 5927.93, having achieved the intraday high of 5954.42.

Then it was back to our old friend R2 at 5850 for the next three days.

The intraday lows on the Tues, Wed and Thu were 5862.93, 5854.46 and 5849.82 respectively.

On Friday it went down to 5809.61, and we know R2 had slipped to 5800 on Monday, but whether it had last Fri who knows, but anyway, Fri was strike 4, so it was on borrowed time either way.

Of course, yesterday, we are now back to the bottom zone boundary, and despite the very early spike, the FTSE hit 5950 twice in the afternoon before capitulating.

Three times, if you include the real time close of 5948.80, before the auction wiped 6-points from it.

So, same as last week, if it can hold above 5950, then there is literally no ratio up to 6050, then just Y2 above that, and as we are only half way there is still time.

 

Range:            5800  to  5950        

Activity:          Moderate

Type:              On balance only just bullish

 

Nb. Our comment on 10/12/20

 

Some might say “boring FTSE”, but despite it being so timid, it has, for us at least, proved to be an exemplary expiry so far.

Again, and as we said last time, helped considerably by the static ratios.

And, as one can see in the table above, there has been absolutely no change in them this week.

Well, this is not strictly true, as they have changed, mainly rising above the zone, it is just that they haven’t moved enough to change bandwidths.

The brilliant aspect of this, is that it is extremely obvious for everyone to see how the index actually interacts when it hits these ratio levels.

Of course, the lack of ratio movement, denotes an underlying lack of activity, which in itself, leads to a heightened degree of sensitivity.

When no one is doing anything, even the futures activity generated by the dynamic delta of Y2, will create waves.

Essentially the first two weeks of this expiry was about the support generated by the R2 ratio, which moved between 5800 and 5850 at that time.

This last week, has been all about the bottom boundary of the FTSE’s zone, 5950.

Just look at the first three closing levels last week, 5942.94, 5949.94 and 5946.25 respectively.

But these were definitely not the extent of it, as the FTSE constantly toyed with 5950 throughout the week.

The beauty of it, was on Thursday, when it eventually broke through, it (twice) came down to test 5950, and rather than capitulating, found support…big signal.

Will we see a R to R ratio expiry? Probably not now, as with the rollover and expiry this week, coupled with its sensitivity, we have to say it should just stay zone-bound.

 

Range:            5950  to  6050        

Activity:          Poor

Type:              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

Oct
07
2020
October 7th, 2020 by Richard

The SPX gets its new zone, but is that it?

 

Nb. Our comment from the 09/29/20

 

Hopefully this week will be as fascinating as last week.

As we saw the market dip down to meet Y2, before staging a great comeback, to end the week at 3298.46.

This meant it spent the weekend nicely in its zone. No coincidence for us.

The slightly troubling aspect, and we are fully aware that we constantly say the intermediary expiries are far more sensitive than the triples, but, even so, Y2?

Still, very early days, but it is something one should be very aware of, as in the land of nothing, even a few futures can have an impact.

Nb. Although activity is “poor”, it only just made that threshold.

Which is also what we say about Y1, as it is like the market is on ice, frictionless, and a just a little impetus can result in a big move.

Do not forget, this Y1 ratio bandwidth alone, goes from 3195 all the way up to 3405.

In normal times, a 210-point, or 6.3% range would be more than enough to keep everyone happy.

And, if it is a textbook expiry, then it moves to test one end, before reversing to test the other, before ending in the zone, which is a two-way trip, so if timed correctly can result in 12.6% in those 4-weeks, which is more than enough for equities, let alone derivatives.

Again, another “no coincidence for us” that last nights close was 3351.60, which is virtually the same as September’s settlement price (or its zone) and which may still harbour aspirations for this expiry.

If 3245-3255 does want to become the next zone, ordinarily we would expect the market to hover in its vicinity, if for nothing else but to establish its credentials, but, being in so much Y1 ratio, we can’t see that happening easily.

So, for us, over the next day or so, the battleground is going to be between its existing zone, 3295-3305, and Y2, at 3405.

Obviously, whichever one wins, will go a long way to deciding what will happen next.

 

Range:            3305  to  3405         

Activity:          Poor

Type:              Neutral

 

 

Nb. Our comment for 10/07/20

 

Please be our guest and check what we said last time, as rather than having to repeat it, this is why we include it in this comment.

The zone has moved, and to 3345-3355.

Also, this may not be the end of it, but early days yet.

The surprise was it has taken so long, as it has literally just moved today, despite the market “hovering in its vicinity” for so long.

The other aspect was what we said about Y2, then at 3405.

Of course, 3405 featured prominently this week, this being the demarcation line of a significant step-up in ratio, as much as moving from one Y ratio to another can be.

Although, we have pointed out previously, that this expiry is proving to be extremely sensitive, as it was Y2 it bounced up from when the market hit 3195 earlier on this expiry.

As Y2 is currently 3455, then in the last day or so it has also been slowly climbing to this level from the aforementioned 3405, and yesterday, for example, was 3430, which considering the intraday high was 3431.56, says a lot.

Perhaps, something else worth a cursory glance, is that the intraday low was 3354.54, or the top of the new zone.

The fact that the market is following a retreating Y2 ratio, is good news, as is the upwardly mobile zone, but when it is hitting Y2 and a piece of bad news comes out, then what happened yesterday is only to be expected.

Don’t loose sight of the fact that the Y ratio bandwidth in its entirety is still a gobsmacking 385-points.

The real issue is that the ratio movement is painstakingly slow, and we are now entering the end-game of this expiry, so it may well just run out of time.

The fact that both puts and calls saw money coming off the table, with still a week and a half to go, just sums up the lack of involvement, and hence its sensitivity, at present.

 

Range:            3355  to  3455         

Activity:          Very poor

Type:              On balance not 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

Oct
06
2020
October 6th, 2020 by Richard

FTSE's zones bottom boundary 5950 critical, again.

 

Nb. Our comment from the 09/28/20

 

As we mentioned on the 23rd at the start of last week it was all about the support R2 was providing at 5800.

That very same day the market rallied, but significantly failed to hold above R1, which was at 5900, closing at 5899.26.

Extremely close, but no biscuit, and to make matters worse, it was by design, as in real time the market closed at 5906.48, and it was the auction that took it below.

The next day, Thursday 24th saw the intraday low of 5805.28, which was back to our old friend R2, and made it strike 3.

We did calculate the ratios on Friday, and R2 had moved up to where it is today, at 5850.

So, the big question, is whether the intraday low of 5771.49 is close enough to R3 at 5750 to be called a test, and for us, that is not quite, as we would prefer to see it within 10-points, or, at the end of a 2% move, when all the greeks spike.

Shame though, as with the intraday high of 5843.72, that would constitute a bandwidth test.

Obviously now, 5850 is the crucial level, with R1 at 5900 just above that.

But as this market has been playing near R3, then 5900 should hold no fear for it.

Of course, once, or if, it gets above these levels, then all it has in its way is the minimal Y2 ratio and its zone.

So, it has a tough 50 to 60-points ahead of it, but if it can achieve that, then there is nothing meaningful in its path all the way up to 6150.

Naturally, our first goal, would be to see the market back in its zone, so our target is 5950 to 6050, but being honest, we would love to see this index travel from R to R ratio and then end the expiry in its zone for the perfect expiry.

 

Range:            5750  to  5850        

Activity:          Moderate

Type:              Bearish

 

 

Nb. Our comment on 10/06/20

 

There has hardly been any change in the FTSE’s ratios, which is a really good thing, as you can see them in action without having to spot a moving target.

In fact, last week, you only had to remember two levels really, so not a big ask.

But, had you dome so, your timing should have been impeccable.

On the very day of our last note, 28th Sept, we mentioned the levels, if you hadn’t seen them in the table, and it was the zones bottom boundary that was the pertinent one.

The market stormed ahead straight from the off, but it wasn’t until early afternoon that it encountered 5950.

It had two more pops at it, roughly 40mins between each, before it gave up, and finished at 5927.93, having achieved the intraday high of 5954.42.

Then it was back to our old friend R2 at 5850 for the next three days.

The intraday lows on the Tues, Wed and Thu were 5862.93, 5854.46 and 5849.82 respectively.

On Friday it went down to 5809.61, and we know R2 had slipped to 5800 on Monday, but whether it had last Fri who knows, but anyway, Fri was strike 4, so it was on borrowed time either way.

Of course, yesterday, we are now back to the bottom zone boundary, and despite the very early spike, the FTSE hit 5950 twice in the afternoon before capitulating.

Three times, if you include the real time close of 5948.80, before the auction wiped 6-points from it.

So, same as last week, if it can hold above 5950, then there is literally no ratio up to 6050, then just Y2 above that, and as we are only half way there is still time.

 

Range:            5800  to  5950        

Activity:          Moderate

Type:              On balance only just 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

Sep
29
2020
September 29th, 2020 by Richard

SPX good bounce off Y2, weekended in its zone, now decision time

 

Nb. Our comment from the 09/25/20

 

Volatility and whipsaw, as we say, are still the name of the game.

However, and we must hold our hand up here, these ridiculously wide Y ratio bandwidths are a new phenomenon, so we don’t have much, if any, precedents to draw from.

In the past we have had wide bandwidths, but generally only for one, or even part of one, expiry, and almost always due to a lack of involvement.

This lack of involvement, or fence-sitting, could always be traced to all the market participants essentially not knowing what to do, for a particular reason, and, rather ironically, quite often because of a looming election.

So, under the current circumstances, there is an element of this, but there is also something new now in the mix.

And that is the crash-down, and as we warned, the crash-up.

Make no mistake, because there was no ratio, or no resistance, then the market essentially vacuumed itself skyward, leading to new all-time highs.

There is a large element of this being a direct result of all the money injected, and we did see this in Germany, when they last announced their huge QE programme a few years back, the DAX rocketed up, through very high levels of ratio as the wall of money was just so vast.

Was that a natural market move, of course not.

Is this a natural market move, of course not.

What this means is the $100 question, and looking at the way the ratios are aligned, this market could/should easily trade from 3100 up to 3500, in the next three weeks.

The problem is, if it does, will the momentum be stopped by just R1? Rather unlikely in our opinion.

Is this proper market regulation and supervision? Possibly, if they get away with it, but just like back in March, the risk is there, and plain to see, so no excuse.

Don’t forget the new recent all-time high was a titanic struggle against R2.

 

Range:            3095 (3195)  to  3295         

Activity:          Average

Type:              Neutral

 

 

Nb. Our comment for 09/29/20

 

Hopefully this week will be as fascinating as last week.

As we saw the market dip down to meet Y2, before staging a great comeback, to end the week at 3298.46.

This meant it spent the weekend nicely in its zone. No coincidence for us.

The slightly troubling aspect, and we are fully aware that we constantly say the intermediary expiries are far more sensitive than the triples, but, even so, Y2?

Still, very early days, but it is something one should be very aware of, as in the land of nothing, even a few futures can have an impact.

Nb. Although activity is “poor”, it only just made that threshold.

Which is also what we say about Y1, as it is like the market is on ice, frictionless, and a just a little impetus can result in a big move.

Do not forget, this Y1 ratio bandwidth alone, goes from 3195 all the way up to 3405.

In normal times, a 210-point, or 6.3% range would be more than enough to keep everyone happy.

And, if it is a textbook expiry, then it moves to test one end, before reversing to test the other, before ending in the zone, which is a two-way trip, so if timed correctly can result in 12.6% in those 4-weeks, which is more than enough for equities, let alone derivatives.

Again, another “no coincidence for us” that last nights close was 3351.60, which is virtually the same as September’s settlement price (or its zone) and which may still harbour aspirations for this expiry.

If 3245-3255 does want to become the next zone, ordinarily we would expect the market to hover in its vicinity, if for nothing else but to establish its credentials, but, being in so much Y1 ratio, we can’t see that happening easily.

So, for us, over the next day or so, the battleground is going to be between its existing zone, 3295-3305, and Y2, at 3405.

Obviously, whichever one wins, will go a long way to deciding what will happen next.

 

Range:            3305  to  3405         

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.

Posted in Uncategorized

Sep
28
2020
September 28th, 2020 by Richard

FTSE done the hard yards, now just R1in its way.

 

Nb. Our comment from the 09/23/20

 

Well, don’t we feel a bit silly for not calculating the ratios here on Monday or Tuesday.

Obviously, there have been big changes since we last looked at them on Friday, the day the September expiry ended.

Of course, there has been a lot of activity, and where we have “very good”, it is worth mentioning that this is just a smidgen below the threshold of “strong”.

But the main reason we are a bit aggrieved, is we don’t know when the zone changed, or when R2 moved from 5850 to 5800, and now we never will.

Both rather pertinent so far this week, needless to say.

May not see it, but what we have noticed, is R3 at 5750 has been steady, and more than that, while R2 has obviously been slipping, this level has actually strengthened.

In fact, because of this divergence, 5800 is in clear danger of dropping to R1, which would make the jump up to R3 at 5750, all the more impactful.

If 5800 was R2 yesterday, and therefore because the intraday low was 5794.54, then the market’s reaction to this, means that it should be even more pronounced when, or if, it encounters the dynamic hedge futures buying at R3.

Otherwise there is not else to say, as it looks a perfectly normal ratio table now, balanced, with the zone not far away, all aided and abetted by some decent levels of activity. 

 

Range:            5800  to  5900        

Activity:          Very good

Type:              Neutral

 

Nb. Our comment on 09/28/20

 

As we mentioned on the 23rd at the start of last week it was all about the support R2 was providing at 5800.

That very same day the market rallied, but significantly failed to hold above R1, which was at 5900, closing at 5899.26.

Extremely close, but no biscuit, and to make matters worse, it was by design, as in real time the market closed at 5906.48, and it was the auction that took it below.

The next day, Thursday 24th saw the intraday low of 5805.28, which was back to our old friend R2, and made it strike 3.

We did calculate the ratios on Friday, and R2 had moved up to where it is today, at 5850.

So, the big question, is whether the intraday low of 5771.49 is close enough to R3 at 5750 to be called a test, and for us, that is not quite, as we would prefer to see it within 10-points, or, at the end of a 2% move, when all the greeks spike.

Shame though, as with the intraday high of 5843.72, that would constitute a bandwidth test.

Obviously now, 5850 is the crucial level, with R1 at 5900 just above that.

But as this market has been playing near R3, then 5900 should hold no fear for it.

Of course, once, or if, it gets above these levels, then all it has in its way is the minimal Y2 ratio and its zone.

So, it has a tough 50 to 60-points ahead of it, but if it can achieve that, then there is nothing meaningful in its path all the way up to 6150.

Naturally, our first goal, would be to see the market back in its zone, so our target is 5950 to 6050, but being honest, we would love to see this index travel from R to R ratio and then end the expiry in its zone for the perfect expiry.

 

Range:            5750  to  5850        

Activity:          Moderate

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

Sep
25
2020
September 25th, 2020 by Richard

SPX Y Ratio bandwidth narrows, but still a mad 12.6%

 

Nb. Our comment from the 09/22/20

 

We do not normally add our last comment of the previous expiry to the new one, but as we did comment, last Friday, on how things stood in October, we couldn’t help but blow our own trumpet.

Two things; Firstly, the zone back then, and on Monday, was 3345-3355, which is significant.

As, and secondly, when the market expired at 3353.60, right in its zone, all was well and good, but, the second it went below this zone the first warning bell should have been sounding.

And, when it closed at 3319.47, below the zone, and therefore in bear territory, it should have been more of a siren than a bell.

Volatility and whipsaw, right from the off, and only to be expected with so much of the minimal Y ratio present.

Which also ties in with the drop today in the zone, and, although not published, this is actually where the October zone in September was.

It only recently moved up to join September’s, almost certainly due to the rollover and expiry, so it has hardly had any time at all to cement this move.

Furthermore, with so much of the minimal Y1 ratio around, the zone could almost be anywhere from 3300 all the way up to 3400.

So, rather surprisingly, the fact that the SPX has recovered, and is looking to hover around its zone, is actually a good thing, despite yesterday’s 90-point move.

Although we appreciate you can’t tell from the table above, but, although the zone flipped back, Y2 and R1 either side of the zone, at either zone level, are static.

As is R2 below it, but R2 above has actually come in a bit.

Overall, though, the Y ratio bandwidth may have improved to 460-points from 510 on Friday, but this still represents 14%, so don’t go getting complacent just because the first couple of days are gravitating near the zone, as this expiry is probably only just getting going.

 

 

Range:            3095  to  3295         

Activity:          Moderate

Type:              On balance only just bearish

 

 

Nb. Our comment for 09/25/20

 

Volatility and whipsaw, as we say, are still the name of the game.

However, and we must hold our hand up here, these ridiculously wide Y ratio bandwidths are a new phenomenon, so we don’t have much, if any, precedents to draw from.

In the past we have had wide bandwidths, but generally only for one, or even part of one, expiry, and almost always due to a lack of involvement.

This lack of involvement, or fence-sitting, could always be traced to all the market participants essentially not knowing what to do, for a particular reason, and, rather ironically, quite often because of a looming election.

So, under the current circumstances, there is an element of this, but there is also something new now in the mix.

And that is the crash-down, and as we warned, the crash-up.

Make no mistake, because there was no ratio, or no resistance, then the market essentially vacuumed itself skyward, leading to new all-time highs.

There is a large element of this being a direct result of all the money injected, and we did see this in Germany, when they last announced their huge QE programme a few years back, the DAX rocketed up, through very high levels of ratio as the wall of money was just so vast.

Was that a natural market move, of course not.

Is this a natural market move, of course not.

What this means is the $100 question, and looking at the way the ratios are aligned, this market could/should easily trade from 3100 up to 3500, in the next three weeks.

The problem is, if it does, will the momentum be stopped by just R1? Rather unlikely in our opinion.

Is this proper market regulation and supervision? Possibly, if they get away with it, but just like back in March, the risk is there, and plain to see, so no excuse.

Don’t forget the new recent all-time high was a titanic struggle against R2.

 

Range:            3095 (3195)  to  3295         

Activity:          Average

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.

Posted in Uncategorized

Sep
23
2020
September 23rd, 2020 by Richard

Will R2 be enough to help the FTSE bulls.

 

Nb. Our comment from the 09/18/20 (Not published)

 

Nb. Our comment on 09/23/20

 

Well, don’t we feel a bit silly for not calculating the ratios here on Monday or Tuesday.

Obviously, there have been big changes since we last looked at them on Friday, the day the September expiry ended.

Of course, there has been a lot of activity, and where we have “very good”, it is worth mentioning that this is just a smidgen below the threshold of “strong”.

But the main reason we are a bit aggrieved, is we don’t know when the zone changed, or when R2 moved from 5850 to 5800, and now we never will.

Both rather pertinent so far this week, needless to say.

May not see it, but what we have noticed, is R3 at 5750 has been steady, and more than that, while R2 has obviously been slipping, this level has actually strengthened.

In fact, because of this divergence, 5800 is in clear danger of dropping to R1, which would make the jump up to R3 at 5750, all the more impactful.

If 5800 was R2 yesterday, and therefore because the intraday low was 5794.54, then the markets reaction to this, means that it should be even more pronounced when, or if, it encounters the dynamic hedge futures buying at R3.

Otherwise there is not else to say, as it looks a perfectly normal ratio table now, balanced, with the zone not far away, all aided and abetted by some decent levels of activity.  

 

Range:            5800  to  5900        

Activity:          Very good

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.

Posted in Uncategorized

Sep
22
2020
September 22nd, 2020 by Richard

The SPX Oct expiry still has a huge Y ratio bandwidth.

 

Nb. Our comment from the 09/18/20 for the Sept Expiry

 

Well it is humble pie time for us, and really, we should know better than to assume something is going to happen before it actually does.

We are, of course, referring to the fact we just assumed the zone was going to revert back to 3395-3405.

Evidently, it hasn’t.

In our defence, all the signs we there, and if it wasn’t literally the last few hours of the expiry, we believe we would have been correct.

What is impressive though, is the strength in the ratios, both above and below the zone, in these final hours, and, sorry, there is no way anyone can foresee that amount of activity suddenly manifesting itself.

For the record, the settlement price for the Sept SPX was 3353.60.

We haven’t produced a table for the October expiry, but while we are here, this is a good opportunity to let you know how it stands at the moment.

This is a snapshot of how it is, before it becomes the front month, so please bear this in mind, as it means it is not quite fully developed.

Furthermore, we are returning to an intermediary expiry, from a triple, so, if history is anything to go by, everything scales down very significantly, and, therefore, sensitivity should increase.

The zone is the same as September’s.

Ironically, 3395-3405 as the potential new zone is quite probable.

But R1 below the zone, does not kick-in until 3070, whereas above it, until 3580.

Obviously, we expect these to change significantly by next week, but as it stands, we are back to a 510-point Y ratio bandwidth.

So, if you are hoping for a quiet market, then, on this evidence, we suspect you will be disappointed.

 

 

Range:            3355  to  3405         

Activity:          Good

Type:              On balance bearish

 

 

 

Nb. Our comment for 09/22/20

 

We do not normally add our last comment of the previous expiry to the new one, but as we did comment, last Friday, on how things stood in October, we couldn’t help but blow our own trumpet.

Two things; Firstly, the zone back then, and on Monday, was 3345-3355, which is significant.

As, and secondly, when the market expired at 3353.60, right in its zone, all was well and good, but, the second it went below this zone the first warning bell should have been sounding.

And, when it closed at 3319.47, below the zone, and therefore in bear territory, it should have been more of a siren than a bell.

Volatility and whipsaw, right from the off, and only to be expected with so much of the minimal Y ratio present.

Which also ties in with the drop today in the zone, and, although not published, this is actually where the October zone in September was.

It only recently moved up to join September’s, almost certainly due to the rollover and expiry, so it has hardly had any time at all to cement this move.

Furthermore, with so much of the minimal Y1 ratio around, the zone could almost be anywhere from 3300 all the way up to 3400.

So, rather surprisingly, the fact that the SPX has recovered, and is looking to hover around its zone, is actually a good thing, despite yesterday’s 90-point move.

Although we appreciate you can’t tell from the table above, but, although the zone flipped back, Y2 and R1 either side of the zone, at either zone level, are static.

As is R2 below it, but R2 above has actually come in a bit.

Overall, though, the Y ratio bandwidth may have improved to 460-points from 510 on Friday, but this still represents 14%, so don’t go getting complacent just because the first couple of days are gravitating near the zone, as this expiry is probably only just getting going.

 

 

Range:            3095  to  3295         

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

Sep
18
2020
September 18th, 2020 by Richard

Humble pie time, as the SPX's zone didn't change, which also means an expiry bullseye though.

 

Nb. Our comment from the 09/16/20

 

As today is the rollover, therefore the expiry is this Friday, please don’t get hung-up on the fact the zone has reverted to 3345-3355.

There is a time lag in the movement of the zone, which is essentially why we have Y1 and Y2 ratio levels, which we constantly refer to as minimal.

The overriding point therefore of these minimal levels is to indicate, as early as possible, the rate of change, and therefore the potential next move.

The trouble is, that in a triple, the direction may be obvious, but it just may take a bit of time for that amount of activity to actually facilitate the move.

So, for this expiry, the move was signalled way back when, but when it did eventually move, the SPX had turned around and was mid process of losing 247.14-points.

So, no wonder it thought twice, and reverted, but, again in the meantime, 3395-3405, looks like the target.

And anyway, the old bottom boundary, 3345, did its job, as one could easily see its influence on the market at the tail end of last week, and we for one, are not overly surprised that the market bounced from this region.

The other point to make, is in our last FTSE note, we pointed out that this index losing 247 while the FTSE rose 233, realigned the markets and their ratios, putting both about 2% below their respective zones heading into the final week, so it was fascinating how each has gone about achieving a similar aim from a similar starting line.

Needless to say, and rather in keeping, the SPX raced ahead, achieving it essentially in one day, whereas the FTSE, is still struggling, and being very pedantic.

Now it will be all about trying to take the steam out of the market, as we often liken this amount of Y ratio to an ice-rink (very little impetus goes a very long way), so to end in its zone is similar to a beginner trying to land a curling stone in the bullseye.

Nevertheless, it will be revealing how this market reacts to Y2, as it should reveal how committed the bulls actually, and, don’t forget, R1 is not that far above.

 

Range:            3355  to  3405         

Activity:          Poor

Type:              On balance bearish

 

 

 

Nb. Our comment for 09/18/20

 

Well it is humble pie time for us, and really, we should know better than to assume something is going to happen before it actually does.

We are, of course, referring to the fact we just assumed the zone was going to revert back to 3395-3405.

Evidently, it hasn’t.

In our defence, all the signs we there, and if it wasn’t literally the last few hours of the expiry, we believe we would have been correct.

What is impressive though, is the strength in the ratios, both above and below the zone, in these final hours, and, sorry, there is no way anyone can foresee that amount of activity suddenly manifesting itself.

For the record, the settlement price for the Sept SPX was 3353.60.

We haven’t produced a table for the October expiry, but while we are here, this is a good opportunity to let you know how it stands at the moment.

This is a snapshot of how it is, before it becomes the front month, so please bear this in mind, as it means it is not quite fully developed.

Furthermore, we are retuning to an intermediary expiry, from a triple, so, if history is anything to go by, everything scales down very significantly, and, therefore, sensitivity should increase.

The zone is the same as September’s.

Ironically, 3395-3405 as the potential new zone is quite probable.

But R1 below the zone, does not kick-in until 3070, whereas above it, until 3580.

Obviously, we expect these to change significantly by next week, but as it stands, we are back to a 510-point Y ratio bandwidth.

So, if you are hoping for a quiet market, then, on this evidence, we suspect you will be disappointed.

 

 

Range:            3355  to  3405         

Activity:          Good

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

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