Category: Uncategorized
January 4th, 2018 by Richard
The SPX certainly did have R1 in its sights, and it didn’t take very long for the market to set up camp right on it.
Very interestingly this coincided with the DJX hitting their level and it was that index that was having all the problems and acting as a brake here on the SPX.
When it did eventually give way, this market had no hesitation at all in speeding right up to the next level, R2 at 2715, getting as high as 2714.37.
As one can see R2 has slipped to 2730 today so we will be none the wiser until we see it breach this level to determine whether or not they still have the conviction, but at least it is now acting like an index that has seen two jumps in its NZ already this expiry.
Range: 2705 to 2730
Activity Poor
Type: Bearish
[affilinet_performance_ad size=468×60]
The NDX has certainly sprung to life, which may sound a bit daft to say about an index that has jumped 180-points in 2 days, but for us most of that was just the Y1 ratio bandwidth.
What we mean is taking on and beating Y2 yesterday and they also added over 40 strikes, and today another 30, on top of decent activity, and it is this that we mean.
The ratios have leapt below the zone and tumbled above and the NZ moves up to 6375-6425, so in fact there is so much going on it’s a blur, but as it now stands it is back in Y1 with Y2 now at 6600.
Range: 6425 to 6600
Activity: Off the scale
Type: Bearish
[affilinet_performance_ad size=468×60]
Rather bizarrely it has been the DJX that has been the reluctant one, but even on the very first day of the rollover, back on 11th December 2017 we have been highlighting 24900.
The DJX may have been reluctant but don’t be fooled by it as they were more than happy for the others to take the lead on this, and no doubt making it a lot cheaper as well, as this was always going to happen, the only question was when.
For the record there is a step-up at 25100.
Range: 24900 to ……
Activity: Poor
Type: Bullish
[affilinet_performance_ad size=468×60]
Posted in Uncategorized
January 4th, 2018 by Richard
The FTSE recaptured 7650 yesterday and we have to hold our hands up as we neglected to mention that it had fallen so much it was just clinging on to the R2 status.
This leaves our step-up level, 7700, as the remaining R2 representative.
However, the ratios are weaker across the board today, so we see the return of Y2 below the zone for example.
More importantly our step-up level is more of a rung now, but it is still R2 which is still very aggressive for an intermediary expiry.
Range: 7600 to 7700
Activity: Moderate
Type: Bearish
[affilinet_performance_ad size=468×60]
The DAX has to be one of the most spectacular bounces off R1 we have seen recently.
From the low of 12745, and for the purists a drawdown of 5 ticks on a twelve-thousand-point index is literally nothing, to a high of 13023.
That is 278-points, wow just about sums it up.
Although across two days, in reality it was just about 24 hours from low to high.
Admittedly our target would have been the bottom boundary of the zone, but if riding the wave with a tight stop then the upper boundary would have been the target.
Now it is back in its zone will we have to wait for another bandwidth test is the only question?
Range: 12950 to 13050
Activity: Very poor
Type: Bullish
[affilinet_performance_ad size=468×60]
Posted in Uncategorized
January 3rd, 2018 by Richard
Well it is not very often the SPX rises by twice as much as the DJX so it is important to highlight it when it does.
Of course, once it was above 2685 and back into the Y1 ratio bandwidth, there was absolutely no reason for it not to take full advantage.
This puts R1 firmly in its sights, but as we said the DJX is still the elephant in the room and so please read what we say below and take that in conjunction with the situation here.
Hardly any change in the ratios today, which is hardly surprising considering the level of activity, and this also says a lot about yesterday’s move.
Range: 2680 to 2705
Activity Very poor
Type: On balance bearish
[affilinet_performance_ad size=468×60]
If the SPX took full advantage of being in their Y1 ratio bandwidth here in the NDX they took total advantage of being in theirs.
Our step-up level of 6475 held the market back for most of the day in fact but it was still just Y1 at the end of it.
It is debateable whether at the end of a 117-point move being 12-points shy of Y2 at 6525 is a hit or not.
We would say that is strike one as we can find no other reason for what would stop such a rampant market at this precise point, after all it is just 0.18% away, but we understand a degree of doubt.
Range: 6325 to 6525 or 6525 to 6725
Activity: Average
Type: On balance bullish
[affilinet_performance_ad size=468×60]
To us the fact that the DJX didn’t want to go back to 24900 is very plain to see as is the reason why.
However, for the broader market they must be wondering just why this index only managed a rise of 0.42% while the SPX achieved 0.83% and the NDX a massive 1.80%.
We suspect it may just be a matter of timing as there is still three weeks to go, or it could just be it wants to be the forerunner, whichever it is still going to be the defining event for the US markets for this expiry.
Range: 24700 to 24900
Activity: Poor
Type: Neutral
[affilinet_performance_ad size=468×60]
Posted in Uncategorized
January 3rd, 2018 by Richard
In the FTSE we mentioned “7700 is what we call a step-up, as it is just below the R3 ratio threshold, so may well provide an early insight into the level of conviction remaining”, and as the market got as high as 7691.34 that answered that.
However, it was the 7650 level that was far more important, and it took a very long time to break, holding out for about 3 and a half hours, and when it did go the market quickly hit 7624.14.
The fact they rallied twice just went to show the bulls are still trying, but the second attempt needed the auction to add 8.5-points to get the close back to the pertinent level, so all to play for again today.
Range: 7600 to 7650 or 7650 to 7750
Activity: Poor
Type: Neutral
[affilinet_performance_ad size=468×60]
The DAX just couldn’t be more compliant to the ratios at the moment.
First the NZ Bandwidth test, then the breakout and yesterday a drop of 172-points all the way down to R1 at 12750, getting as low as 12745, which considering the numbers involved is as close to a bulls-eye as you will get.
Now it knows where the book-ends are to this Y2 ratio bandwidth it will most probably trade within them, at least for a day or so.
Range: 12750 to 12950
Activity: Very poor
Type: Bullish
[affilinet_performance_ad size=468×60]
Posted in Uncategorized
January 2nd, 2018 by Richard
SPX , NDX & DJX Ratio table 2nd Jan 2018
Our last coverage of the SPX was December 22nd and despite it being open for the 4 days over last week it has only moved 10-points, the close that day being 2683.34.
It is the ratios that have moved more importantly and it should come as no surprise that the NZ is now 2670-2680.
The ratios have filled in considerably below the zone and have essentially remained static above it.
However, nice though that it is, that it parked itself over the New Year in neutral, the real issue is the next 3 weeks of this expiry and with the R ratios still 100-points apart it will not be dull.
Range: 2670 to 2680
Activity Average
Type: On balance only just bearish
[affilinet_performance_ad size=468×60]
Since we last covered the NDX very little has changed, the most obvious being the appearance of R2 below the zone.
However, on both sides, there have been considerable improvements in the R1 levels but at the end of the day there is still an enormous amount of Y1 ratio present.
We did mention 6475 was a significant step-up level for us and on Friday 22nd they closed at 6465.17 having peaked at 6467.83 which was bit of a defining moment for us.
From here on in it is a blank page as there is still 400-points of Y1 ratio so it could go anywhere as there is virtually no ratio there to act as a brake, in either direction of course.
Range: 6325 to 6525
Activity: Average
Type: On balance only just bearish
[affilinet_performance_ad size=468×60]
Our last comment in the DJX was to watch out for Tuesday 26th as the US markets were open when virtually everyone else was closed, so it would have been a perfect opportunity for an assault on 24900.
As it happened it was a rather boring day and we had to wait until Friday before they felt brave enough for another crack at it, this time getting as high as 24871, which was not quite as high as the last time, when it achieved 24876.
For us this is the elephant in the room and will be the defining moment for this expiry, either they break through or the wall is just too high, but it wouldn’t be there in the first place if the expectation or desire wasn’t, and that is really a lot of expectation and desire.
Range: 24700 to 24900
Activity: Average
Type: On balance bullish
[affilinet_performance_ad size=468×60]
Posted in Uncategorized
January 2nd, 2018 by Richard
FTSE & DAX Ratio levels 2nd Jan 2018
We left the FTSE in a 50-point range between the upper boundary of its NZ at 7550 and R2 at 7600 while it had closed at 7592.66, imbedded in R1 ratio.
As one can see from the above table a lot has changed in the three days up to the end of 2017, and the year-end “bonus” rally was the clear winner, yet again.
However, this now leaves the market in R2, which it is no stranger to this expiry of course, but this is because the ratios above the zone have fallen back a long way as last Wednesday 7650 was R3.
For this week it now leaves the market in a 100-point R2 ratio bandwidth, which is tough going in its own right, but it will mainly depend on how it reacts now the main incentive has been removed.
7700 is what we call a step-up, as it is just below the R3 ratio threshold, so may well provide an early insight into the level of conviction remaining.
Range: 7650 to 7750
Activity: Average
Type: Neutral
[affilinet_performance_ad size=468×60]
For the DAX we left them at 13072 and being in so much Y1 ratio wondering why they were not moving 100 plus points a day.
Interestingly the ratios have hardly moved here at all, but what the market has been doing has been much more significant and in stark contrast to London.
The last 3 days before Christmas the DAX was bouncing off the upper boundary of its NZ with lows of 13026, 13013 and 13059 respectively, but never actually closing inside it.
This continued on the Wednesday after the holiday with the low of 13020, but that was strike 4.
The really conclusive day came on the Thursday with the high of 13069 and the low of 12965 which made this a classic NZ Bandwidth test, so a breakout looked imminent.
So, on the Friday, while London was enjoying their bonus rally here they opened close to their bottom boundary and closed below it for the first time this expiry, but more importantly this meant they finished the year in bear territory.
This makes the index unique as every other one we track is at or just been at record highs, and considering all that Y ratio above the zone there was no ratio hinderance, so they could easily have been forging ahead like all the others had they so wished.
The reaction to being in bear territory will now be crucial as it is still quite a way to the first R ratio.
Range: 12750 to 12950 or 12950 to 13050
Activity: Average
Type: Neutral
[affilinet_performance_ad size=468×60]
Posted in Uncategorized
December 22nd, 2017 by Richard
The SPX opened up 3.77-points and more to the point above 2680, however judging by the relativity this was more DJX led than anything here we feel.
Nevertheless, above it they opened and as the low was less than a point below this the market was above it all day, so nobody is any the wiser.
However, the big news here is that the NZ has moved, and to our first choice, but our second is still very much on the cards.
But just like an advancing army, if it goes too quick the supply lines get very stretched, and it’s not a problem unless it hits serious resistance.
Range: 2655 to 2705
Activity Moderate
Type: On balance bearish
[affilinet_performance_ad size=468×60]
Essentially what we said yesterday in the NDX “If this market hadn’t started so manically, and don’t forget Y2 was at 6475 at the start of this expiry, we would be calling 6475 the step-up level within the Y1 ratio bandwidth, so just like the SPX where this index closed is significant but not as much as what it does today”.
However, the difference today is the level of activity, and please don’t forget as the bar is still so low this is again very flattering, but it has got the ratios below the zone climbing rapidly.
Range: 6325 to 6525
Activity: Outstanding
Type: Bearish
[affilinet_performance_ad size=468×60]
The wait is almost over in the DJX, and perhaps we should have mentioned this earlier, but due to the way the holidays fall Boxing Day is always a favourite for achieving goals over here.
Basically, almost every other market is closed and even here it is rather thin, so it always provides a unique window of opportunity.
On Monday this index hit 24900 (high 24876) and to us it is no coincidence that the last three days highs have been 24850, 24852 and 24850.
Range: 24700 to 24900
Activity: Moderate
Type: On balance bearish
[affilinet_performance_ad size=468×60]
Posted in Uncategorized
December 22nd, 2017 by Richard
No surprise the FTSE broke 7550, in fact the change in the zone narrowing the trading range to just 50-points very probably caused it as it forced the decision one way or the other.
And it has been battering 7550 all week so we were on day 4 and innumerable attempts during those days so if anything was to surprise it would have been if it had held out for even longer.
That said having found R1 so impenetrable they seemed to have had no problem with R2 at 7600, which does surprise us.
It is silly season and new records at Christmas are rather passé it happens so regularly, but it still takes some doing, and R3 next up.
Range: 7550 to 7600 or 7600 to 7650
Activity: Poor
Type: Bearish
[affilinet_performance_ad size=468×60]
Well it was a big test for the DAX and although it finished above its zone it was far from a convincing victory.
The open was virtually unchanged but soon they were back inside their zone, bottoming at 13013 and stayed there for almost the entire morning.
Nevertheless, it finished back in its Y1 ratio bandwidth and Y2 has returned to 13350, the level that called the high on Tuesday, but overall the ratios are firmer both sides.
Range: 13050 to 13350
Activity: Average
Type: On balance just fractionally bullish
[affilinet_performance_ad size=468×60]
Posted in Uncategorized
December 21st, 2017 by Richard
SPX , NDX and DJX Ratio Table 21st Dec 2017
It seemed a lot quieter in the SPX yesterday but it was actually quite a significant day.
How significant depends on today really but the fact it went as low as 2676.11 and more importantly closed below Y2 at 2680 means it is back in the Y1 ratio bandwidth, albeit only just.
It is a case of feeling the levels out by the market as it is still probably a little shell-shocked from Monday, but it will soon realise there is precious little ratio here or even near.
We are still anticipating a move in the NZ and by tomorrow it should be 2645-2655 but 2670-2680 is also looking promising.
Range: 2605 to 2705
Activity Strong
Type: On balance bearish
[affilinet_performance_ad size=468×60]
At least activity has picked up in the NDX but please don’t forget the bar is so low it is very flattering.
Nevertheless, it has created R12 on either side of the zone, although they are so far away as things stand they are for decoration only.
If this market hadn’t started so manically, and don’t forget Y2 was at 6475 at the start of this expiry, we would be calling 6475 the step-up level within the Y1 ratio bandwidth, so just like the SPX where this index closed is significant but not as much as what it does today.
Range: 6325 to 6525
Activity: Very strong
Type: On balance bearish
[affilinet_performance_ad size=468×60]
On the surface the shift in the DJX’s NZ is just a realignment within some very weak Y1 levels and no real surprise.
However, it could just come back to bite as where the market closed in now just above the upper boundary.
This is where what we said yesterday may come into play, that the bulls have used the support from this level to reinvigorate themselves.
But a point it may well be worth noting is that the Y1 ratios are so very weak here that the NZ could in fact stretch from 24300 to 24700, so if it does break back below and into its zone it might just find the carpet has been snatched away.
Range: 24500 to 24700 or 24700 to 24900
Activity: Moderate
Type: On balance bullish
[affilinet_performance_ad size=468×60]
Posted in Uncategorized
December 21st, 2017 by Richard
FTSE & DAX Ratio Table 21st Dec 2017
The high in the FTSE of 7550.60 just simply does not do justice to how long this index battered R1 for.
And that was strike 3 as it has been going at it all week.
The only, but potentially very, significant change today is the jump in the NZ, well more of a hop really, as it is all within the Y1 ratio bandwidth as was.
So rather than the upper boundary being almost 100-points away at 7450 it is now just 25-points away, and if it gets back inside that then there is no ratio at all until 7400.
Range: 7500 to 7550
Activity: Good
Type: Neutral
[affilinet_performance_ad size=468×60]
The DAX started optimistically with an open of up almost 30-points.
It didn’t get much higher and as we said it has a lot of Y1 to play around in so triple digit moves should be a minimum we would think.
However, with the low of 13026 this means it has met the upper boundary of its NZ, and significantly rallied to close above it.
So, big test today for the bulls, stay above the zone or will neutrality win over?
Range: 12950 to 13050 or 13050 to 13400
Activity: Poor
Type: On balance only just fractionally bearish
[affilinet_performance_ad size=468×60]
Posted in Uncategorized
