Category: Uncategorized
December 12th, 2017 by Richard
To us it is a very complacent SPX that we are seeing, almost as if just because it is expected it will just happen.
By which we mean the move up in the NZ, as now it is 85-points below the market where it is, and in no scenario, is that good or healthy.
The appearance of Y2 at 2625 obviously signals the choice but to achieve this it really needs to pull the finger out and stop leaving it to someone else.
Yesterday R3 was at 2665 and this is still a level to be reckoned with, but beware of opening gaps, otherwise from where it is now the ratios start climbing rapidly and at this stage of an expiry, tax bonanza or not, it should not be challenging these levels.
Range: 2630 to 2670
Activity: Poor
Type: Bearish
We don’t expect very much from Jan, or at this stage, but the level of activity we are seeing really is disappointing.
However, it is not so much the lack thereof but rather the fact it is negative, and as there is so little to begin with it seems churlish to take money off the table.
However, it has caused the R ratios to slip above the zone, but as we say above the market the day before rollover should not be taking on R3 and here we are in Jan and not only is that as high as it goes you will have to take motorised transport to reach it.
Range: 2630 to 2660 or 2660 to 2690
Activity: Very poor
Type: On balance not bullish
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To be honest all that trouble they took in the NDX to keep it inside its NZ last week made us think that this would be it for this expiry.
Therefore, the suspicion is that this is equity led as the final nail was yesterday as after the strong open on Friday it was reined in and was still within spitting distance, but not anymore.
However, we do not think derivatives are that bothered as it looks a shoe-in that the NZ will return to 6375-6425, and very probably by tomorrow, after all it is inside a mammoth Y1 ratio bandwidth.
Range: 6425 to 6525
Activity: Poor
Type: On balance only just bearish
Regarding the Jan expiry where we use the term “bothered” above that pretty much sums up this expiry currently, as in a big “not”.
Activity bears this out and actually even in the Dec expiries activity is really quite low, but two out of the three in Jan haven’t even made it onto the scale they are so bad.
Considering there is still 400-points of Y1 ratio either side of the zone in this expiry really anything could happen.
Range: 6325 to 6725
Activity: Did not register
Type: N/A
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It is a very big day for the DJX as it has R3 directly ahead and the rollover tomorrow.
The difference between this index and the SPX is that this index has been doing this all year, so best hope it will not be a case of being better to travel than arrive.
Here the NZ is a cool 1300-points below the current market, but by now this index is so blasé about it all it is making no pretence whatsoever to adjust its zone.
However, this is the mighty Dec expiry so if anything is going to pop a bubble this is it, either that or total and utter capitulation, and judging by the activity it may have already decided.
Range: 23600 to 24500
Activity: Did not register
Type: N/A
Basically, our closing comment from yesterday “However, B1 at 24900 dispels any notion that this bubble is over” essentially says it all for Jan.
If Dec does result in total and utter capitulation it doesn’t just mean that’s it, as what is happening here testifies.
It means they can do what they like.
Range: 24300 to 24500
Activity: Poor
Type: Bearish
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Posted in Uncategorized
December 12th, 2017 by Richard
Well the market in the FTSE is certainly trying to force the pace as right on cue, to the day, it moves ahead and gets its nose in front of 7450.
It is worth pointing out that in real time this index closed at 7445.62, so it was the auction that succeeded where during the day it couldn’t.
The trouble is we are not seeing it, the move in the NZ that is, and in fact it is 7150-7250 that is having another go rather than anything above the zone.
There is a day to go but we can’t help feeling that they needed to do more yesterday.
Range: 7400 to 7550
Activity: Poor
Type: On balance not bearish
The auction yesterday also took the market above Jan’s zone which is also an issue.
However, this index shouldn’t really come into play until after the rollover, so from Wednesday onwards, and as it stands it is still dwarfed by Dec so it is difficult to see how much influence it may actually have.
But if Dec wanted to get their zone higher then we would expect to see some sort of confirmation here if only by ratio movement and if anything we are seeing the opposite as the ratios are firmer above the zone.
Range: 7350 to 7450 or 7450 to 7500
Activity: Strong
Type: On balance only just bearish
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Activity remains very decent in the DAX but we suspect the rollover is in charge now.
It started very well opening up almost 30-points and got as high as 13192 but the market was evidently very aware of what happened of Friday when it hit R1 at 13250 and shied away.
There are a lot of changes today, firmness below the zone resulting in R1 replacing Y2, and weakness above it.
Basically, all the ratios have slipped a bit, mainly pushed out by the introduction of Y1, which does give the market a bit more leeway as even if the zone doesn’t move being in Y1 on the rollover is not that bad.
Range: 13050 to 13250
Activity: Moderate
Type: Bearish
In respect of Jan with 400-points of Y1 ratio above the zone it could happily accommodate any move in the Dec zone.
Otherwise it is symptomatic of Jan that despite such a large number of low ratios we haven’t got one single change today.
Range: 13050 to 13450
Activity: Average
Type: Neutral
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Posted in Uncategorized
December 11th, 2017 by Richard
DAX Dec to Jan Rollover table 11th Dec 2017
Hopefully you noticed on Friday the DAX hitting R1, getting as high as 13240.
This in itself is near enough on such a large index to call it a hit, but especially so when it is coming on the end of a +195-point move, and the fact it halved this afterwards was also a fitting reaction.
However, unlike London, here this has stimulated activity, so there is still plenty of life left in this expiry we suspect.
R1 below the zone firms up a bit and both DR and B1 above the zone also come in a bit.
The real issue today will be if it wants another crack at R1 and don’t forget in our forecast back on the 20th November we did say it should be capable of taking on R2.
We did back then express serious concern over the lack of ratio below the zone, which hasn’t improved much either, and the serious risk that presented, but we also said a lot would depend on whether or not the DJX did actually return to normal.
It hasn’t, and despite that scare when it went down 213-points, the new records over there have certainly helped here.
Which we did suspect when we said “Hopefully it will continue as before and just go from the NZ upwards” which it has done, and rather strangely R2 is still at 13350, but again we are happy with R1 if this week doesn’t pan out as we got our scare, the DJX came to the recue and we nailed the pattern that led to that big down move.
Range: 13050 to 13250
Activity: Average
Type: On balance bullish
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For the first look at January and there is not a lot that jumps out.
As usual it is underdeveloped, but as an intermediary this is to be expected and in comparison, to this time last year its actually slightly better, and of course it is the DAX.
The most notable aspect is the rather large Y1 ratio bandwidth immediately above the zone, and where it ends which also misses out a level.
And if it stays like this then next trip could be an exciting one.
Range: 13050 to 13450
Activity: Average
Type: Neutral
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Posted in Uncategorized
December 11th, 2017 by Richard
FTSE Dec to Jan Rollover 11th Dec 2017
We have to give the FTSE credit for trying at least, and it was right on cue in the last hour peaking at 7412.21, but ending in failure as they remain inside their zone.
From the format used here one can tell it is the rollover and in the mighty Dec things can get quite excitable as derivative inspired equity activity ratchets up several notches so everyone always wrongly attributes this, which can be self-perpetuating.
However, judging by the derivative activity, and this level in any other expiry it would be nearer the top of the scale, reflects disinterest, as this is essentially a lot of money coming off the table.
December expiries are always tremendously difficult to call, for the very reasons mentioned above, but with just a couple of days to go and with this type of activity it could just be a boring one.
So, how did we do in our forecast, and here’s what we said “We would like to say it will stay inside its zone, as it has been doing more or less for the last few expiries.
But therein lies the issue as we believe at some stage, probably towards this expiries rollover, 7450-7550 will have another go at being the NZ, which would change everything entirely”.
The rollover is on Wednesday so the jury is still out on 7450-7550, but in respect of the rest of it we are more than happy with that.
The first week was quite aggressive but it never closed more than a few points above its upper boundary, and since then it has had just the one close outside, being 7460.65 on the 28th November, so where short term index forecasting is concerned that is as good as you will get.
Range: 7300 to 7400
Activity: Moderate
Type: On balance fractionally not bullish
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For the first look at January and one is immediately struck by how much smaller it is, although it perhaps looks busier as there are more levels on show.
One of the other main differences is the NZ’s are out of sync, with this one being just a smidgen higher.
The common denominator across the two is 7350 to 7400.
Another stand out feature is the return of a decent amount of Y ratio, which will hopefully allow this index much more freedom to move outside its zone.
Our forecast for this expiry is next Monday of course.
Range: 7350 to 7450
Activity: Average
Type: Neutral
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Posted in Uncategorized
December 8th, 2017 by Richard
SPX , NDX and DJX Ratio Table 8th Dec 2017
The SPX was basically outmuscled by the DJX (see below) yesterday but credit where it is due as it certainly gave it a good go.
It did open a point easier and then struggled with R2 at 2630 for the first hour and a half before it eventually succumbed.
The only change today is DR above the zone slips to 2695 so the pertinent levels are unchanged.
However, it is the rollover next week and very soon this will have an impact and as it stands it is 60-points away, although as we said earlier in the week once the rollover starts 2595-2605 should start making a move towards being the next NZ.
Range: 2630 to 2655
Activity Moderate
Type: On balance just bearish
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In the NDX as we said yesterday the big test will be if it can stay inside its zone, which it did.
The high was 6333.29 so it did give it a good go at breaking out, and this figure just does not do justice to how long it stayed on the upper boundary.
No change today, so still a big test, but now the finish line is in sight with the rollover next week.
Range: 6275 to 6325
Activity: Average
Type: On balance fractionally bearish
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Basically, a repeat of what we said Wednesday as well as yesterday in the DJX as it still applies “if it tests it today (24100) and if it holds then that is a really big decision, even more so in light of the rollover a week today”.
And this time there was no doubt at all regarding the test of R3 at 24100 as it went as low as 24101.
It reacted like it had been given an electric shock the rebound was so emphatic.
Obviously, this has given the whole pot a stir and activity has picked up but more importantly R3 has now slipped to 24500, so ironically it has ended up in the R2 ratio bandwidth anyway.
Range: 23600 to 24500
Activity: Moderate
Type: Bearish
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Posted in Uncategorized
December 8th, 2017 by Richard
FTSE & DAX Ratio Table 8th Dec 2017
Of course, it is not an identical pattern in the FTSE with the November expiry but it is not that dissimilar either.
Last trip was also all about the comfort or safety of its Neutral Zone and having spent the best part of the first three weeks inside it from the Friday before the rollover it sprang to life.
So, best be on your guard as although this time we really don’t detect any hints of frustration this is actually what can cause a breakout, that and perhaps an out of sync zone in the next expiry.
Range: 7300 to 7400
Activity: Very poor
Type: Bullish
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For the DAX we are back to the familiar pattern but it seems to have lost a lot of its aggression after its trip below the NZ and into bear territory.
The open was moderately higher, but at 13026 was still inside its zone, but then it managed to break back above the upper boundary getting as high as 13083.
This didn’t last long and for the rest of the day it meandered around in its NZ, but the bulls are there, hence the close, just not quite confident enough.
The only change is R2 below the zone but after 3 weeks we eventually see R3 scrape in down there as well, so way to go but hardly emphatic.
Range: 12950 to 13050 13050 to 13250
Activity: Poor
Type: On balance bearish
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Posted in Uncategorized
December 7th, 2017 by Richard
To be frank we thought yesterday in the SPX was bit of a holding pattern type day with a range of just 10-points.
However, it seems it was more than that as there has been a continuation of the weakness in the ratio above the zone, but now R2 has slipped to 2630.
With the market standing still this realignment has had the effect of putting this index back into its R1 ratio bandwidth, although this now makes todays open crucial.
Range: 2605 to 2630 or 2630 to 2655
Activity Poor
Type: On balance bearish
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The NDX got off to a shaky start yesterday opening down 21.93-points which took it further away from the comfort of its zone.
However, the low was not much worse than that and this time it powered up through the bottom boundary of its NZ and managed to close inside.
The big test will be today to see if it can hold within it, which is not that easy at this stage of an expiry, but particularly so in December.
If the zone holds it could well be that its journey is done for this expiry.
Range: 6275 to 6325
Activity: Moderate
Type: On balance bearish
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Basically, a repeat of what we said yesterday in the DJX as it still applies “if it tests it today (24100) and if it holds then that is a really big decision, even more so in light of the rollover a week today.
Of course, if it breaks below it then this too has significant ramifications.
And overshadowing all this is whatever happens will define whether or not it is still in its bubble, and expiring in R3 in the mighty Dec expiry will not bring any Christmas cheer to someone”.
The low on Tuesday was 24155, then yesterday it went as low as 24134 twice before closing near these lows.
Difficult to tell whether these were tests or not, ordinarily we would say no, but now this index is twenty-four thousand 34-points is only 0.14% so its not impossible shall we say that they were.
Range: 24100 to ……
Activity: Only just registered
Type: Bullish
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Posted in Uncategorized
December 7th, 2017 by Richard
The FTSE was rather aggressive first thing, and our old bugbear comes to the fore here as in the real world the open was nowhere near 7327.50.
In fact, the low of 7289.36 was nearer to the open, which was also a solid test of the bottom boundary of the zone it has been so cosy in.
So, no surprise to us that within minutes it was safely back inside and the fact the close was as near to dead centre as you could get is probably no coincidence.
No change to any of the ratios and activity was particularly low but as this will build as we head towards the rollover it will become harder and harder to keep this index calm.
Range: 7300 to 7400
Activity: Very poor
Type: On balance not bearish
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Just to highlight how misleading London’s open was here in the DAX they opened down 151-points at 12897, significantly below their bottom boundary.
Interestingly they also recovered strongly which resulted in a strong test of the bottom boundary, but to break back in, which failed.
They then went on to make 3 more tests, all of which were far more timid than the first, before they did eventually break back up courtesy of the Street.
Again, you couldn’t get a finish closer to dead centre of their NZ if you tried which again is no coincidence to us.
Range: 12950 to 13050
Activity: Moderate
Type: Bearish
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Posted in Uncategorized
December 6th, 2017 by Richard
It is now almost a week since the SPX hit the pivotal DR ratio level and it hasn’t really retreated very far.
However, at some stage as it is now just a week to go until the rollover it will start having to think about that, and this is still some way away.
But this is the biggest of the big so rarely does it not go a little wild (or perhaps wilder) so with all this in mind we have had a close look and combined with (too much) experience we suspect when things hot up, from now on in other words, that 2595-2605 will make a move to be the rollover level.
Range: 2615 to 2655
Activity Poor
Type: Neutral
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Today we see that rarest of beasts in the NDX, their NZ heading south.
Today it has dropped to 6275-6325 and considering where the market closed this could bring a bit of relative stability.
However, it would be wise to remember, that although this is the first change in 4 days, in this expiry it has moved 4 times already, so we would like to think this will be it for the run-in to the rollover but history is against us.
Apart from the zone there are no significant other changes, so plenty of Y1 still either side, it’s just a question of whether it wants to calm down.
Can’t believe they added yet another 6 strikes, and deep ITM ones as well, truly too much.
Range: 6175 to 6275 or 6275 to 6325
Activity: Average
Type: On balance bearish
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It could be a really big day for the DJX although we are the first to admit everything looks innocuous enough.
The low yesterday was 24155 so definitely not a test of the bottom of our trading range, which of course is also R3.
If it tests it today and if it holds then that is a really big decision, even more so in light of the rollover a week today.
Of course, if it breaks below it then this too has significant ramifications.
And overshadowing all this is whatever happens will define whether or not it is still in its bubble, and expiring in R3 in the mighty Dec expiry will not bring any Christmas cheer to someone.
Range: 24100 to ……
Activity: Average
Type: Neutral
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Posted in Uncategorized
December 6th, 2017 by Richard
The FTSE continues to wallow in its zone, but complacency may just come back to haunt it.
Basically, the ratios continue to weaken below, and we have mentioned 7150-7250 as possibly wanting to be the next zone several times, well now with the appearance of Y2 below the zone its challenge is now all too apparent.
Of course, this does not mean it will succeed, and sometimes the threat is enough to avert it, but it is gearing up for a great rollover just as anticipated.
Range: 7300 to 7400
Activity: Poor
Type: Bullish
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Well it wasn’t the same pattern in the DAX that we saw in the first 9 days of this expiry, although it looked as if it was going to be at the start.
Although the open was practically unchanged it did try to move ahead just as it used to, but fell short, only getting as high as 13094.
The difference this time was that it came all the way back to test the bottom boundary hitting a low of 12960, and the fact it held is also quite bullish.
It has been a very exciting expiry so far but perhaps worth remembering is that on the very first day, the 20th Nov, this index closed at 13058, so exciting going nowhere.
Range: 12950 to 13050 or 13050 to 13250
Activity: Very poor
Type: Not bullish
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Posted in Uncategorized
