Category: Uncategorized
January 11th, 2018 by Richard
Interesting dynamic in the SPX today.
The ratios continue to tumble above the zone and increase below it and by tomorrow 2695-2705 should be the next NZ, which is abut as bullish as you can get it.
However, the fly in the ointment is the fact the ratios have receded so much the market now finds itself back in the Y ratio, which in fact it would have done even if it didn’t move yesterday.
So, this is where it gets interesting, as despite all the bullish signs the trading range today is the Y ratio bandwidth, and this still starts at 2680.
Range: 2680 to 2755
Activity Moderate
Type: On balance bearish
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In the NDX it is nice to see a stationary zone but with the rollover starting next week we very much doubt we have seen the last of them.
The ratios are in fact stronger across the board, but it will have to go some way yet to redress the persistent weakness above the zone.
However, below the zone they are all firmer, but still a very long way away so only pertinent in that it represents a view.
Although the daily range was 40-points the fact it is in so much Y ratio that is actually rather tame and it could get far more volatile from here on in.
Range: 6575 to 6725
Activity: Strong
Type: On balance bearish
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Activity in the DJX has gone the other way today, so it is difficult to get excited about it.
The one aspect we should mention is that as it should be stuck in its “uncomfortable” trading range (100-points to the big figure depending on the open) the last two days take on a slightly different complexion with this in mind.
Tuesday the low was fine at 25308 and yesterday the high 25404 was fine as they corresponded with the respective opens.
However, on Tuesday the high overshot by 39-points whereas yesterday it was the low by 44-points, which can often reveal where the most effort is being made.
Range: 24900 to ……
Activity: Only just registered
Type: Bullish
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Posted in Uncategorized
January 11th, 2018 by Richard
The FTSE tested R2 first thing, getting as high as 7756.11, before retreating almost the entire way down to the other end of our trading range, bottoming out at 7716.21.
After that the day was effectively done with it trading unchanged until the auction, where it put on almost 8-points so it would be perfectly poised for another attempt today.
There haven’t been any changes in the ratios, which is somewhat surprising considering the level of activity, but there has been a significant move.
This is at 7650, and although it doesn’t appear in the above table, it looks certain that 7600-7700 will be the next NZ.
Range: 7700 to 7750
Activity: Average
Type: On balance just fractionally bullish
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The large activity continues in the DAX, and rather confusing it is as well because it actually comes in below Wednesday’s level, but only because of a degree of netting off.
Anyway, over the course of the last two days this has totally changed the ratio landscape, and so it would be wise to treat this as a new beginning, with new levels not to mention a new NZ.
All hardly surprising when the large positions of Wednesday were reversed and then some, by a considerable way, with a new large one added, and in just plain numbers to the tune of 31% of the entirety of this expiry in just 2 days, rather impressive really.
Range: 13250 to 13450
Activity: Very strong
Type: Bearish
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Posted in Uncategorized
January 10th, 2018 by Richard
SPX , NDX and DJX Ratio Table 10th Jan 2018
Ratio decimation is the only way to describe it above the zone in the SPX.
Stronger ratios below the zone, weaker above it and a rising NZ are all three bullish signals neatly lined up in a row.
Our reservation comes from the fact it is ridiculously one-sided, as well as the speed of it, because in the stampede it leaves a vacuum behind it.
To compound this is the fact it is across all three indices, which multiplies the chances of a spanner being thrown into the works, but make hay while the sun shines is the saying.
Range: 2740 to 2770
Activity Moderate
Type: On balance only just bearish
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The NZ in the NDX has moved up again, but it is almost by default rather than by design, or more importantly by bullish momentum.
The only other change is a small tweak in R1 below the new zone that doesn’t really affect anything, even the market ended up essentially where it started.
We don’t think for one minute that this will be the last move, especially as there is still so much minimal Y1 ratio still present, and perhaps worth noting that it stretches from 6325 up to 6725, a staggering 400-points, so hopefully no airborne spanners here either.
Range: 6575 to 6725
Activity: Average
Type: On balance bearish
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The table nor the markets position on it hasn’t changed in the DJX but there is still a lot going on for sure.
Please note activity, and in any other expiry except this one with that abnormally enormous position distorting everything, this level in an ordinary intermediary expiry would come in as off the scale.
However, could it just be that that position is being unwound? Certainly, a possibility, and it will take neurosurgeon like skills to do that without causing a ripple or two we think.
Range: 24900 to ……
Activity: Strong
Type: Bearish
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Posted in Uncategorized
January 10th, 2018 by Richard
In the FTSE’s ratio table above the move by R1 to 7700 doesn’t look that much, but it does reveal the continued weakness in the ratios above the zone.
Because this time last week R1 started at 7600, R2 at 7650 and R3 at 7750, so with the market closing at 7648.10 it was already knocking on the door of these higher ratios.
Fast forward to today and by recapturing 7700 the market stays in R1, but now there is 150-points of Y ratio underneath it.
Although the ratios are tumbling the market itself does not appear to have maintained its aggressiveness, so it is just as well the resistance is caving in before it, and hopefully we will see a move up in the NZ as thoughts will be turning towards the rollover next week very shortly.
Range: 7700 to 7750
Activity: Good
Type: On balance just fractionally bearish
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Huge changes in the DAX but first we must mention yesterday as it is relevant to today’s changes.
Y2 had moved to 13400 and 13450 had dropped to R1 with the market previously being sensitive to Y2 this was going to be interesting, and true enough with the high of 13425, splitting the two, was perhaps the obvious outcome.
Because of, or in spite of, it has stimulated some large activity which has changed the landscape almost entirely, especially above the zone, and very probably with the rollover just a week away the target.
We suspect the full intent will become all too apparent when, or if, the market hits R2.
Range: 13050 to 13450
Activity: Outstanding
Type: Bullish
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Posted in Uncategorized
January 9th, 2018 by Richard
The ratio erosion in the SPX continues while below the zone it continues to rise and by enough now that it has at last breached R2 which was bit of a dam.
However, all the important stuff is still above the zone, and a move up to 2695-2705 is still very much on the cards, and it may not even be the last we see this expiry.
This in itself is very unusual, as here a move an expiry is quite raunchy, and yet we have had two already in Jan.
Anyway, R2 has indeed moved to 2755, but more importantly that is it now.
This is not just rare, but rather unique, as to our knowledge all three US indices have never been north of all their respective highest ratio, so R2 is actually now historical.
Range: 2730 to 2755
Activity Moderate
Type: On balance bearish
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The NDX is back in Y1 ratio but that is only because the ratios are falling faster than the market is rising.
However, the market won’t know this until it hits 6725 so it may well still have an impact.
Otherwise the NZ here jumps to 6475-6525 making its second move of this expiry, however this is not unusual at all for this index, but what is slightly different is it is very early on as we have just started the back nine.
But the most glaring aspect across all three is the lack of meaningful ratio above their respective zones.
Range: 6525 to 6725
Activity: Very good
Type: On balance just bearish
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As we mentioned in the DJX it is all about the trade at 24900 and how long it is going to remain.
In the meantime, all we can say is that we are now very much in “uncomfortable” territory, so depending on the open the daily range should be between the 2 big figures in a 200-point range.
Range: 24900 to ……
Activity: Very good
Type: On balance only just bullish
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Posted in Uncategorized
January 9th, 2018 by Richard
FTSE and DAX Ratio table Jan 2018
The FTSE was certainly the poor cousin in Europe and was evidently struggling in R2.
We did say “(R2) the surprise is that it is still at 7700 and not 7750” and we have seen this move today, but by failing to move for yesterday means today’s reaction is all the more severe for it.
So today 7600 has slipped back into the Y ratios making the R1 ratio bandwidth just 100-points, but making 7650 a crucial level now.
Range: 7650 to 7750
Activity: Very good
Type: On balance only just bearish
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Being in Y2 has certainly stimulated the DAX, which must have been bit of a nasty surprise.
On Friday Y2 then at 13350 stopped the markets 165-point advance at 13332, so yesterday with Y2 moving to 13250 that put it below the market which had closed at 13319.
So today in reaction to what was obviously an uncomfortable circumstance Y2 drops back to 13400, putting it back above the market, but 13450 drops to R1 leaving R2 at 13550.
This means some tough, but not quite as tough as they once were, ratio levels now directly in the markets path.
On a positive note all this has now left 13150-13250 as a potential new NZ.
Range: 13050 to 13400
Activity: Good
Type: Bearish
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Posted in Uncategorized
January 8th, 2018 by Richard
R2 in the SPX held the market right up until the last hour, so it did very well indeed, especially considering that this was also strike 3.
Today the weakness continues, which makes it hard to have a high conviction in its current level, but 2755 represents quite a step-up so that should hold today at least if 2745 fails.
All this weakness above the zone raises the distinct possibility of the NZ moving to 2695-2705, which just goes to show actually how weak these ratios really are because at the start of this expiry 2705 was R2.
Range: 2705 to 2745
Activity Poor
Type: Bearish
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Friday was a big day in the NDX although not for the introduction of a swathe of new strikes.
The open was up 28.55-points which at 6613.13 immediately placed it above Y2.
Moreover, the close being above 6650 means that it remains in Y2 today as the weakness seen here has not gone quite far enough.
However, it has gone far enough to remove R1 entirely.
So just like the DJX there is now nothing more ahead and two weeks to go.
Range: 6650 to ….
Activity: Strong
Type: Bearish
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The step-up level we mentioned in the DJX on Friday was indeed academic as the open took it out of the equation from the very start.
This index opened at 25114 just above the pertinent level, but the low of 25112 made the objective very plain.
Still two weeks to go so now it will be entirely about that position and whether it is allowed to run right up to the expiry.
Range: 24900 to ……
Activity: Poor
Type: Bearish
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Posted in Uncategorized
January 8th, 2018 by Richard
As we said on Friday “again, this madness about the open”, this time however we don’t think anyone really believes the market actually opened at 7695.88 as in the real world it was easily above 7700.
Also, we did mention R2 “was looking fragile” and so it proved, the surprise is that it is still at 7700 and not 7750, which trading wise should be the next hurdle, and should in fact make the trading range 7600 to 7750 today.
The ratio table above has lost Y2 both above and below the zone, and the ratios are weaker around the market level, but at the end of the day, and although London is easily the poorest performer among the indices, it is still battling R2 which is very aggressive not to mention unusual for a Jan expiry.
Range: 7700 to 7800
Activity: Average
Type: Bearish
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We did fixate a bit on R2 on Friday but on the ratio table Y2 at 13350 was plain for all to see, so no real surprise that having leapt 165-points the high was 13332.
Interestingly Y2 has come in today, meaning it has actually leap-frogged the market, which does make R2 the next level.
In bull markets the indices tend to go from the NZ up to the R ratios and then follow them while they retreat, the reverse being the case for bear markets (NZ and down), but so far, this expiry the DAX is acting like a range bound, or trendless, market, which is one that bounces between the R ratios, and is normally the state of markets that exist for the greatest length of time, this age of QE being the exception.
Nevertheless, this does make the DAX the odd one out, but we will soon see at R2 we suspect.
Range: 13050 to 13450
Activity: Average
Type: Bullish
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Posted in Uncategorized
January 5th, 2018 by Richard
So far it seems like R2 is the SPX’s kryptonite as apart from running into that everything else is looking good.
Yesterday R2 was at 2730 and the high was 2729.29 and this makes it two days in a row R2 has halted its advance.
As one can see from the above table it has slipped a bit again today but it wasn’t that long ago that this index headbutted this same R ratio all the way up, and there is still 2 weeks to go.
Range: 2705 to 2735
Activity Moderate
Type: On balance just fractionally bearish
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No new strikes in the NDX today and decent activity.
However, the high yesterday, 6603.17, was definitely a test of Y2, which has held firm although it is fractionally easier today.
The ratios around the market have weakened but as you can see from the table above they are actually firmer out with that.
Bit of a ratio trifecta yesterday with Y2 here, R2 in the SPX and the step-up level in the DJX.
Range: 6425 to 6600
Activity: Very good
Type: Neutral
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In the DJX we mentioned the step-up at 25100 yesterday so it was interesting to see the high being 25105.
Of course, it shouldn’t be where it is, but then again with that position where else would it have been going, so the fact it has discovered a degree of sensitivity now is academic really.
Range: 24900 to ……
Activity: Moderate
Type: Bearish
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Posted in Uncategorized
January 5th, 2018 by Richard
There cannot be anyone left in any doubt about R2 affecting the FTSE after yesterday.
Again, this madness about the open, officially it was 7671.11, which was also Wednesday’s close and yesterday’s low, but in the real world it looked like it got to 7698, which was the first test of R2.
The actual high of 7702.51 was later in the day, but it still represented a very meagre rise in comparison to every other market.
Today the ratios are weaker across the board, R2 remains at 7700, but is rather fragile now.
Range: 7650 to 7700
Activity: Very poor
Type: Bearish
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The DAX opened up 87-points which succinctly answered the question about whether we were going to get another bandwidth test first as that put it at 13065.
The fact the low was 13062 also gave a big hint.
However, all is not as rosy in the ratio world as they are stronger above the zone and weaker below it, which is bearish.
Although, with 13450 moving to R2 this very neatly draws a line as that makes it now a very big jump from the Y ratios at that exact point.
Range: 13050 to 13450
Activity: Moderate
Type: Bullish
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Posted in Uncategorized
