Category: Uncategorized
July 18th, 2018 by Richard
NDX July to Aug Ratio Rollover Table 18th July 2018
The NDX is as true to form as you can get this expiry.
At the start we had those intraday highs circa 7300 that had so much fun and games with our step-up level at 7275, and in fact the closing high at that point was 7280.70.
It then had that fantastic bounce off its zones bottom boundary, which was then at 6975, and, importantly, this was the day before the DJX hit theirs.
It could so easily have been an entirely different story here had the DJX and SPX not come to its recue the next day, but then that’s the way it works sometimes.
The return of the big player(s) later on sealed this index fate and for the last week or so it has been marching along behind a retreating Y2 just swallowing up all that newly vacated space, which is just so very typical.
Range: 7225 to 7425
Activity: Moderate
Type: On balance only just bearish
Looking ahead to August and we are the first to admit the ratios should really be monitored daily, especially at this particular juncture, but even more so for this index.
So, as it stands, please note the zone here is below July’s and the other main aspect is Y2 above the zone is very close to the current market.
It is a nicely compact expiry, at least so far, and by which we mean not too many additional strikes, but it is also back to the more normal 4-week cycle, so the real defining moment may well be if, or when, the big players decide to come back in.
Range: 7125 to 7475
Activity: Average
Type: Neutral
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July 17th, 2018 by Richard
DJX July to Aug Ratio Rollover Table 17th July 2018
There is surprisingly little to say about the DJX, especially considering how important and dominant it has been this expiry.
However, in one of those little twist of fate, or coincidences we so love, it is intriguing that after all this expiry so far here we are at 25064 and the last settlement price was 25058, hmmm.
Anyway, July has been all about the very unusual and unique zone in the DJX, that has covered the very impressive one thousand points, a new record.
The intraday low on the 28th June of 23997 was a good test of the bottom boundary, made all the more spectacular by the market finishing the day just over 200-points above.
Currently the market has closed just above the upper boundary, and we could argue that Monday’s high of 25072 was a test of R1 at 25100.
Regardless of this we are more than happy to see that the first day of this expiry the market high was 25003, it then went don to its bottom boundary and then back up for a 2000-point (8%) round trip, so what happens in or around here we can live with.
Range: 24000 to 25000 or 25000 to 25100
Activity: Moderate
Type: On balance not bullish
Perhaps a 1000-point zone is the new norm?
Or, it could be that currently this index is just unloved, which is such a far cry from how omnipotent it was in 2017.
It is an intermediary rolling into another, so it was always going to be thin, but this is verging on the emaciated.
A few days to go yet of course, but no scares here, just potentially more great trading.
Range: 24500 to 25500
Activity: Average
Type: Neutral
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July 17th, 2018 by Richard
SPX JLY to Aug Ratio Rollover Table 17th July 2018
There is just too much to say in the SPX but the highlight of our last comment on Friday was looking forward to this index’s first test of a R ratio this expiry.
And it certainly didn’t disappoint as it went on to get as high as 2804.53 with R1 then at 2805.
We did point out that normally under these circumstances the initial reaction it “WTF” as everyone gets blindsided by the sudden futures selling.
Then there is a more cautious approach to see if it is a selling level or just a one-off.
And on Friday you couldn’t get a more perfect example of a double top, both were such clear spikes.
Interestingly, the market didn’t really retreat far either, and we did say the third time it is either put up or shut up.
Well, they certainly got excited, (as we ran the numbers yesterday but didn’t publish) with the highest level of activity so far this expiry, storming in at “very strong” but only just tipping it on the bearish angle.
Nevertheless, it signalled the move yesterday, which we see today with the zone moving up to 2770-2780.
Now, the $100 question is whether this is it for this expiry or it is going to have an attempt to get to 2795-2805.
And, incidentally 2805 is now Y2 with R1 having slipped to 2815, so the door is open but whether the willingness is there is another matter entirely, but activity suggests this expiry is far from over.
Range: 2780 to 2815
Activity: Average
Type: On balance decidedly bearish
This time last expiry when we were looking at the rollover from June into July please remember (or look it up) that then July’s zone was 2695-2705.
By the time it became the alpha it had moved up to 2745-2755, and it was this zone that dominated the first week of that expiry.
Interestingly, the expiry intraday low was 2691.99 on the 28th June, which at that point 2690 was Y2.
We mention this as sometimes it is difficult to remember the exact influence and levels that affect indices early on, but more importantly the fact that are in evidence this early on during the rollover week.
Of course, the market went from Y2 up to R1, so slightly skewed, we would have much preferred R1 to R1 needless to say, but sometimes the other indices have an input, which for July it was the DJX and their big test of their zones bottom boundary at 24000 (intraday low on the same day 23997).
The big difference looking forward to August is that the zones are already in line.
The bigger significance is that between the R1 levels it goes from 2655 all the way up to 2835.
So, the question is whether or not July is going to aim for 2800 for Friday as if it is then August is looking very skewed indeed.
Range: 2780 to 2835
Activity: Average
Type: Neutral
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July 16th, 2018 by Richard
DAX July to Aug Ratio Rollover Table 16th July 2018
The party has still not got going in the DAX and they are now fast running out of time.
In fact, since our last comment, (11th July) this index has been an exciting mover, but at the end of the day it has hardly strayed far from its zone.
However, activity has held up so there is evidently still plenty of expectation.
On the more basic level the zone has not moved, so good it has held on to the recovery we saw, but not so inspiring that it hasn’t made further progress.
All the more so in the context that it has so much Y ratio still around, so its should be easy for the market to move as it would the zone.
However, for us, the big risk remains the US and how they are going to react now they are all hitting levels of ratio generated resistance.
Range: 12450 to 12550
Activity: Good
Type: Neutral
We appreciate we say this every time but please remember the DAX is a slow starter.
However, having just said that, then also please remember this is an intermediary to intermediary rollover, one of just 4 a year, so it will be thin by the very nature of it.
Nevertheless, please note where the zone is, and the fact that below it the ratio only gets as high as R1, so all in all August could be a veritable rollercoaster.
Range: 12350 to 12800
Activity: Average
Type: Neutral
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July 16th, 2018 by Richard
FTSE Jly to Aug Ratio Rollover Table
The battle in the FTSE was fought on Thursday, which was when they managed to hold onto their zone, albeit just.
In fairness, we thought the market might have put up more of a fight on the Wednesday when it had 100-points wiped off it as it dropped straight back out of its zone, or below 7650.
So, although the next day only managed to recoup 59 of those points it was very significant that the close was 7651.33, which was an important battle with the real time close of 7654.31, to stay above the bottom boundary and still in their zone.
This is the rollover week with the expiry on Friday so being in its zone is where it should be, by it is evidently struggling so it could be a real test this week.
Range: 7650 to 7750
Activity: Moderate
Type: Bullish
At the end of the June expiry our comment was “So, the question is whether or not it is safe to get back into the water in July? Sadly, the answer is no…”
But looking forward to August and the answer is a resounding yes.
OK the zone is 100-points below July’s but there is plenty of Y ratio around, so that should mean the return of some decent moves.
For the record the last day of the June expiry this index opened at 7765.79 and closed at 7633.91, so not a lot in 4-weeks, and was exactly what we meant, but this is made all the worse as in the US it has been a trader’s paradise with well over 8% on offer in the NDX for example.
Range: 7650 to 7750
Activity: Average
Type: Neutral
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July 13th, 2018 by Richard
SPX , NDX & DJX Ratio Table 13th July 2018
It really does look like the SPX is going with the flow as the only time we could discern that it took charge was last Friday.
This was when, for the first (and only?) time this expiry that it took on a ratio level, this was its bottom boundary at 2745, when the DJX wasn’t forcing it.
Without any great commitment of its own it will, or should, struggle with R1 as we are now back to where we were on Tuesday.
The ratios are rising below the zone, which in itself could easily move up to 2770-2780, and they are weaker above it, so all looking good, apart from the one proviso.
And this is that it has only been faced with Y ratio throughout this expiry and now it is about to start hitting the R’s and this is a different ball game entirely.
As we said this index seems to be going with the flow, so it may stall for a while until ratio conditions become more benign, but it may not be down to just them as the other two also have levels to face.
Range: 2755 to 2805
Activity Poor
Type: On balance only just bearish
Yup, the NDX definitely gets the Oscar in our estimation as it has easily been the best entertainment.
And right on cue, with the rollover starting next week, we see their zone start that long trek northwards to try and catch this rampant market.
Just a week to go and now a lot of space between the market and those big positions.
One slight fly in the ointment is that despite the ratios above the zone falling away this index in now right on top of Y2.
Of course, please do not lose sight of the fact it is but a Y ratio, but it is also the highest it goes here.
However, it may not be so much about this index alone, although they are known for “doing their own thing” but with the other two both facing ratio levels themselves it might just be a sterner test than it reflects in isolation.
Range: 7125 to 7375 or 7375 to ….
Activity: Average
Type: On balance decidedly bearish
Well if you have been reading our comments the DJX behaviour should not be a surprise.
If anything, it has been a little timid as we would have expected a lot more 300-point days then there have been.
The significant change here is that both the R ratios above the zone have dropped an entire level.
How this may impact things, well we will just have to wait and see as only when the market interacts with that dynamic delta will we get an answer.
Historically though, the first reaction is always “what the f***” as the selling surprises them.
Then there is a cautious retest of the level to see if it was a one-off and to get a feel for the depth if it wasn’t.
After that it is basically put up or shut up, and sometimes if one of the other indices are encountering futures selling due to hitting one of their ratio levels is has a greater impact.
Range: 24000 to 25000
Activity: Moderate
Type: Not bullish
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July 11th, 2018 by Richard
FTSE & DAX Ratio Table 11th July 2018
To be honest even we were getting bored with the FTSE being stuck in the R1 ratio bandwidth 7550 to 7650 below the zone, but great trading though.
But as we said “the problem is that there is still 12 trading days to go in this expiry, so both levels remain critical, it just needs something to break the impasse”, and that was on Monday, in spectacular fashion.
It spent most of the day banging its head on 7650, but when it did eventually break through then it was straight up another 50-points.
The only change in the ratios is 7750 moves up to R2, which should prove quite a hurdle, but with the rollover next week we should remind everyone of those large positions north of here that may yet have something to say.
Range: 7650 to 7750
Activity: Very poor
Type: On balance only just not bearish
The title of our last comment was “DAX invitations posted” which was a reference to our expiry long theme that it really needed a friend.
And it seems it has had a few replies, but it doesn’t quite look like the party has started though.
The most important aspect is that not only has their zones freefall been halted, but it has been reversed, with it reclaiming 12450-12550.
The negative side is that there is still an awful lot of Y ratio around, so precarious doesn’t begin to describe it.
Another positive is that there is some strength in the ratios below the zone as well, with not only R1 climbing but the reappearance of R2.
The biggest problem we see here is now funnily not of its own making, but rather the resistance that the US indices may soon encounter and how they may react may translate badly here.
Interestingly the high on Monday was 12559 and the close was 12543, which looks like this was when their zone moved to this level, which means this newly acquired bullish territory is but a day old.
Range: 12550 to 12750
Activity: Average
Type: On balance bearish
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July 10th, 2018 by Richard
SPX , NDX & DJX Ratio Table 10th Jly 2018
For the SPX it has been about its zone, and more importantly the fact it was below it while the other two basked in bullish territory.
So, we hope you noticed the impressive battle this index had with their bottom boundary at 2745 on Friday.
If that wasn’t attention-grabbing enough, then when it broke the immediate jump to the upper boundary in just minutes should have been.
Obviously, Y2 below the zone was enough to turn things round, but don’t forget it had help from the other two, whereas Y2 here, above the zone, is bit of a lone voice, and, after all, it is just a Y ratio.
However, zipping up through Y ratio is what we expect, so it is hardly proof of any great commitment, that will come when it squares up to a decently robust R1 at 2805.
Range: 2755 to 2805
Activity Poor
Type: On balance only just bearish
For sheer entertainment value the NDX definitely gets the prize, and also the one for behaving exactly how it should in these conditions.
This index has already tested what we refer to as a “step-up” (in ratio as in) level this expiry, which was 7275 and the closing high was 7280.70, being only just superseded by yesterday’s close.
Nevertheless, the step-up level remains, however the big difference this time is the return of the big player(s) we commented on the 29th June.
Apologies, as we didn’t spell it out, but for those who have been around when this last happened, this is a rather typical reaction.
However, it does mean so far in this expiry, or the last three weeks, the NDX has from this level, 7275, although the high was just above 7300, been down to the bottom boundary of its zone (closing low 6969.67) and now back up.
This is an absolutely staggering 600-points, or 8.25%, so no doubt about its entertainment value, although stability not so much.
Range: 7025 to 7325
Activity: Very poor
Type: Bullish
It seems difficult to remember that not that long ago the DJX was testing the bottom boundary of their zone, with the intraday low of 23997 (28th June).
The zone, which incidentally, has remained at its unique and most impressive gargantuan width.
Screaming back to the present and here we are just a couple of hundred points away from its upper boundary.
Bit of an editor’s note here but pay close attention should this index get anywhere close to its upper boundary at the same time the SPX approaches their R1.
Anyway, the point is the DJX’s upper zone boundary is close now, and after that it quickly escalates in ratio in what we would call normal increments.
Range: 24000 to 25000
Activity: Average
Type: Not bullish
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July 5th, 2018 by Richard
SPX , NDX & DJX Ratio Table 5th July 2018
Always a bit tricky after a midweek holiday as for the next two days it can be a little sparsely populated.
Although for the SPX activity has held up, but it is still to make any sort of decisive move.
The intraday low this expiry so far is 2691.99, when Y2 was at 2690, which only goes to show how sensitive it is currently, but at the end of the day it has stubbornly remained below its zone and in bearish territory.
If it had bounced off one of the R ratios we would fully expect a charge to the other corresponding one, but Y2 is generally not a big enough jolt to give it that momentum, so we remain wary of whiplash and expectant of volatility.
Range: 2665 / (2695) to 2745
Activity Moderate
Type: On balance bearish
For the NDX it is still all about its zone.
Initially, just like the DJX, it had a tremendous bounce off its bottom boundary, the intraday low on 25th June being 6976.96.
It then went below and closed fractionally below it, at 6969.67 on the 27th, which so far this expiry is the closing low.
The intraday low was the next day at 6950.23.
So, it definitely has thought about joining the SPX in bear territory, but there are enough bulls remaining to make a very good fight out of it.
However, judging by the fact it is now back within its zone, these bulls do not look confident enough on their own, so they need a fair wind from the DJX before they come out to play.
Range: 6975 to 7025 or 7025 to (7225) / 7325
Activity: Very poor
Type: Neutral
There is no doubt the DJX wants to go better, if only for that rather magnificent bounce off their zones bottom boundary last week, with the intraday low of 23997.
However, it is not just that, as in the intervening period it has blatantly refused to go back to test that level, which happens more often than not, that need for confirmation.
So, to be so convinced first time round is a very good thing, but obviously the SPX is not playing along, and until it does then at the very least it will be like dragging a very heavy anchor for this index.
It still has that unique 1000-point zone to play in, so it could really take-off given a free rein, but please remember that on the other side of this bottom boundary it is only Y1, so if it doesn’t get its own way there is precious little support until 23500.
Range: 24000 to 25000
Activity: Moderate
Type: Bullish
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July 5th, 2018 by Richard
FTSE and DAX Ratio Table 5th July 2018
The FTSE is seemingly caught in no-mans land at the moment, which also happens to be our R1 ratio bandwidth below the zone.
Our last comment was how for the second time the bulls had failed to keep hold of the zone, courtesy of a collapse due to the auction, and therefore how critical 7650 was.
Therefore, no real surprise to see the next two days produce intraday highs of 7636.93 and 7632.12, but just to show the bulls aren’t dead the previous three days also saw intraday lows of 7540.71, 7544.98 and 7560.81 respectively.
The problem is that there is still 12 trading days to go in this expiry, so both levels remain critical, it just needs something to break the impasse.
Range: 7550 to 7650
Activity: Poor
Type: Bullish
For the DAX its zone continues to fall, which is never a good sign.
However, the fact it has fallen and the market has steadied, closing yesterday virtually unchanged from Friday’s close, means it is now back inside its zone.
There can be no disguising how precarious a situation it still remains in, but another small glimmer of hope is that R1 below the zone has remained at 11950, so all it has to do is break out above and back into bullish territory to establish another glimmer.
We of course don’t know for sure when the zone did actually change, but the intraday high yesterday of 12350 is too coincidental to ignore.
So, there is hope, but above all it really needs a friend still.
Range: 12250 to 12350
Activity: Poor
Type: Bearish
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