Category: Uncategorized
December 5th, 2017 by Richard
Although we have seen this opening tactic already this expiry in the SPX we do not think yesterdays was deliberate even though it achieved the same purpose.
It opened up 14.97-points which took it too 2657.19 and above R3 at 2655 but as R3 had only just moved there and as they had yet to test it then we suspect this was just a strong open plain and simple.
However, after the initial flurry we don’t think it was any coincidence that it spent a lot of the rest of the day around it and obviously finished significantly below it.
The ratios are stronger below the zone and weaker above it but no pertinent changes and the trading range remains unchanged.
Range: 2615 to 2655
Activity Moderate
Type: On balance only just bearish
[affilinet_performance_ad size=468×60]
As we said yesterday in the NDX “still in a sea of Y1 ratio, so we would expect volatility anyway, and the focus is all on whether or not it can recapture its zone”.
And we got both in buckets as the open was up 42.81-points but more importantly at 6380.68 which was just above the bottom boundary.
And then to finish down 74.17-points meant a 124-point range so we certainly got the volatility as well, and that only tested one end of the Y1 ratio bandwidth it is in.
The ratios are firmer on both sides of the zone but at the end of the day it is still in a very wide Y1 ratio bandwidth.
Range: 6175 to 6375
Activity: Average
Type: On balance only just bearish
[affilinet_performance_ad size=468×60]
Activity in the DJX has returned to more usual levels which doesn’t actually change anything literally.
So, it remains in the open-ended R3 ratio bandwidth with very little we can add.
Range: 24100 to ……
Activity: Poor
Type: Neutral
[affilinet_performance_ad size=468×60]
Posted in Uncategorized
December 5th, 2017 by Richard
It didn’t require nearly as much effort on Monday to keep the FTSE in its zone, and as we said it seems perfectly happy here.
However, with every other market forging ahead this index was notable for its distinct lack of enthusiasm.
As one can see the appearance of DR below the zone just shows the ratios continue to weaken here which raises the possibility of 7150-7250 making a move to be the next zone, and this would certainly hold things back.
Don’t forget it is rollover next week, so if you think this is exciting then hang on tight.
Range: 7300 to 7400
Activity: Poor
Type: On balance only just not bullish
[affilinet_performance_ad size=468×60]
That answer that about how the DAX is going to react having found itself in bear territory over the weekend.
The open alone put on 177-points and after the initial exuberance that took it as high as 13117 it settled down and spent most of the day around their upper boundary.
A little bit of strength in the ratios below the zone and slippage in those above but really the question is whether or not this now re-establishes the holding pattern we saw for the first 9 days of this expiry?
Range: 12950 to 13050 or 13050 to 13250
Activity: Moderate
Type: Bearish
[affilinet_performance_ad size=468×60]
Posted in Uncategorized
December 4th, 2017 by Richard
SPX , NDX and DJX Ratio Table 4th Dec 2017
The SPX is delicately poised at the moment although after Friday’s recovery the bulls are still being very aggressive.
At one stage it was down 42.06-points in a fitting and proper response to hitting DR at 2655 on Thursday when it got as high as 2657.74.
However, as you can see, DR today has slipped to 2680, and we also see the introduction of R1, so this now gives the bulls a bit more headroom but historically one encounter with DR should be enough, hence pivotal, but these are no ordinary markets what with the big tax concessions dominating everything.
Although it has breached R3 once, well courtesy of an opening gap, so this will be its first test.
Range: 2655 to 2655
Activity Moderate
Type: On balance decidedly bearish
[affilinet_performance_ad size=468×60]
Wow third day in a row that the NDX’s NZ hasn’t changed, although since it moved to this level the market has been below it.
Although, the NZ may not have changed it has not stopped them from adding new strikes to this expiry, so many in fact it is now officially the largest ever expiry by number of strikes.
Please do not ask as no we have absolutely no idea who or why anyone needs so many.
Not a lot else has changes, still in a sea of Y1 ratio, so we would expect volatility anyway, and the focus is all on whether or not it can recapture its zone.
Range: 6150 to 6375
Activity: Moderate
Type: On balance bearish
[affilinet_performance_ad size=468×60]
There has been a rather huge change in the DJX as DR has now gone.
Considering the recovery from a fall 351-points (range was almost 400-points) to being just down 0.17% is remarkable in itself but for us the most important aspect was it getting back above R3 at 24100.
This then coupled with the loss of the next level of ratio means it has effectively got clear skies above, even if that means it is in a R3 ratio bandwidth.
Of course, this magnitude of change could only come about with a high level of activity and despite the tax cuts that is a lot of money coming off the table.
Range: 24100 to ……
Activity: Strong
Type: Bearish
[affilinet_performance_ad size=468×60]
Posted in Uncategorized
December 4th, 2017 by Richard
FTSE and DAX Ratio Table 4th Dec 2017
Again, the FTSE seemed more than happy to be in its NZ, but it certainly had to work for it on Friday.
The low was 7288.73 but it did manage to recover their zone in real time, closing at 7301.23, it was the auction that took it to the wire, which was in fact a victory as at one stage during it looked like establishing a new low.
Although it is not strictly a NZ bandwidth test, as it took place over two days, but the high on Thursday was 7416.26, and we have to grant a bit of leeway as 100-points is a lot, especially in just one day, so be wary of a potential breakout today.
Range: 7150 to 7300 or 7300 to 7400
Activity: Poor
Type: Not bearish
[affilinet_performance_ad size=468×60]
As we said on Friday “this has happened twice before recently (and it’s a really neat trick considering), on the 27th/30th Oct (13226) and the 7th/8th Oct (13393) and on both occasions the following day this index had huge moves, respectively 235.95 and 199.86”, and to which we can now add 29th/30th Nov with a subsequent move of 162.49.
Nevertheless, this has certainly broken the recent pattern and what’s more this puts the DAX into bear territory for the first time this expiry.
In fact, we have to go back to the start of the Nov expiry when this index last tested the bottom boundary (lows of 12931 & 12940) but it never closed below, that is until the rollover and the Nigerian “coup”.
No changes in the ratios today but it is all about how it now reacts in this new situation, especially around Y2 if it tests it.
Range: 12450 to 12950
Activity: Very poor
Type: On balance bearish
[affilinet_performance_ad size=468×60]
Posted in Uncategorized
December 1st, 2017 by Richard
The SPX is getting quite accustomed to the opening gap gambit, yesterday it was up 7.86-points but crucially above R3 at 2630.
It never once looked back either as the low of 2633.93 was also the open.
Furthermore, the old DR level at 2645 hardly held the market back at all although the actual level, 2655, was responsible for the high being 2657.74.
Today it has slipped to 2660 but the last rampant bull market (a very long time ago) is the reason why we call DR “pivotal hedge ratio level”.
Range: 2635 to 2660
Activity Moderate
Type: Bearish
[affilinet_performance_ad size=468×60]
It really isn’t very often we say this in the NDX but it is being the sane one at the moment, so best savour it.
In fact, considering how this index has moved and its NZ then calling this sane is also a bit bizarre.
However, the high yesterday was 6374.19, or the bottom boundary of its zone, and the fact it was in a Y1 ratio bandwidth a 50-point move is only to be expected, as per our range.
No significant changes in the ratios and we suspect today will be all about their zone, but the risk is with the other two now of course.
Range: 6150 to 6375 or 6375 to 6425
Activity: Moderate
Type: Bearish
[affilinet_performance_ad size=468×60]
The only thing we can say about the DJX is that 24100 has today dropped to R3 and DR now starts at 24500.
However, as this index blasted through DR yesterday when it was at 24100 then this index has taken on and beaten the highest there is.
However, there is a reason why DR is called pivotal by us so as far as we are concerned Christmas cheer or not this is now an exceedingly dangerous market to be involved with.
Range: 24100 to 24500
Activity: Average
Type: Neutral
[affilinet_performance_ad size=468×60]
Posted in Uncategorized
December 1st, 2017 by Richard
The FTSE did seem far more comfortable inside its zone and didn’t bother, or even look like it wanted to, chase the DAX higher.
In fact, the high was 7416.26 and as the upper boundary is at 7400 this was evidently enough to dampen any enthusiasm.
The low was 7326.67 which was getting close to being a test of the bottom boundary, but as this was courtesy of the auction, the real time close being 7333.03, then we are certainly not calling this a NZ bandwidth test.
Although, the big news here is the ratio below the zone dropping to R1, which also adds weight to 7150-7250 making moves to being the next NZ.
Range: 7300 to 7400
Activity: Poor
Type: Bullish
[affilinet_performance_ad size=468×60]
It was almost a repeat of the first 8 days of this expiry in the DAX, tried to race ahead, capitulation at the first sign of resistance and a recovery from the low to hold onto a toe-hold above the zone with the real time close of 13056.
The difference yesterday was the auction which took a massive 32.71-points off the index to leave it firmly back inside its zone.
However, this was not the biggest aspect that caught our eye as the real time close was exactly the same as Wednesday’s.
This has happened twice before recently (and it’s a really neat trick considering), on the 27th/30th Oct (13226) and the 7th/8th Oct (13393) and on both occasions the following day this index had huge moves, respectively 235.95 and 199.86. Just saying.
Funnily enough, on the first occasion the auction added 2.31-points and on the second it lost 10.68-points and no prizes for guessing which way the subsequent move went, so today should be interesting. Just saying.
Range: 12950 to 13050
Activity: Poor
Type: Bullish
[affilinet_performance_ad size=468×60]
Posted in Uncategorized
November 30th, 2017 by Richard
We have two surprising aspects in the SPX today, not biggies but certainly worth taking note of.
The first is the appearance of R1 immediately below the zone, in itself unremarkable and to be expected, but what is not is that 2550 remains at Y1 which could indicate it still harbours aspirations to being the NZ.
Secondly is the fact the market got as high as 2634.89 which is a deep incursion into R3, so they really were trying for sure, but ultimately failing and this alone is enough for us to explain the discrepancy between this index and the DJX.
If it does breakthrough although DR has slipped to 2655 the old 2645 will still pack a very hefty punch.
This is turning into a real “mighty Dec” expiry.
Range: 2605 to 2630 or 2630 to 2655
Activity Poor
Type: Bearish
[affilinet_performance_ad size=468×60]
Where can you start with the NDX?
Annoyingly the NZ has moved again, as yesterday’s fall took it right back into their old zone and the bottom boundary yesterday was 6275 and the low was 6279.37, both of which would have made us look better than it appears today.
The reason for the move is the level of activity.
The ramifications are harder to discern but its been a long time since this index was in bear territory so the reaction will be informative once they work out what has happened.
However, what can’t be ignored is the decimation of the ratio above the zone.
Range: 6150 to 6375
Activity: Very strong
Type: Bearish
[affilinet_performance_ad size=468×60]
Yesterday was not as informative as we would have liked in the DJX and sadly we are no wiser as to whether or not this index is back in its bubble.
The open was 23883 up 47-points and being just 17-points from the big figure is too close to call which side its “uncomfortable” range should be on, and of course it is in its R2 ratio bandwidth so no foul doing what it actually did.
The fact the SPX tried so very hard to get past their R3 level and failing, dropping 15-points into the bargain, certainly clouded the issue here.
So, the jury is still out but activity suggests the bulls have been reinvigorated, however now DR comes into play here.
Range: 23600 to 24100
Activity: Average
Type: On balance definitely bullish
[affilinet_performance_ad size=468×60]
Posted in Uncategorized
November 30th, 2017 by Richard
Just as we said yesterday in the FTSE “or wallow like before and slip back to the upper boundary” which is exactly what it did spending almost the entire day just above 7400.
The weakness coming through from the US saw it grab the opportunity with both hands to get back inside its zone.
The ratios are weaker across the board but very interestingly there was an abnormally large move in 7200 which can sometimes reflect a motive to becoming the next NZ, which would be a game-changer indeed, so watch this space.
In the meantime, we still believe this index would be happiest inside its NZ, at least until rollover week.
Range: 7300 to 7400 or 7400 to 7550
Activity: Moderate
Type: On balance not bullish
[affilinet_performance_ad size=468×60]
The DAX is bit of a conundrum at the moment as on Tuesday it started wild then quickly went compliant whereas yesterday it started like a steam train but capitulated all to easily.
And then, once it had got back inside its NZ, it decided to fight to stay above it in the auction.
It just needs consistency, but so far this expiry it has had 3 closes inside their zone and 5 outside, but only by an average of 10.8-points, so hardly aggressive if they count at all.
Range: 12950 to 13050 or 13050 to 13250
Activity: Very poor
Type: Bullish
[affilinet_performance_ad size=468×60]
Posted in Uncategorized
November 29th, 2017 by Richard
The SPX employed a tactic more often used by the NDX in which the strong open, up 4.52-points, took it to 2605.94 which was above R2 before the futures even opened.
This is the equivalent of limit up or down in commodities of course, and just to make sure the low was 2605.44.
However, it was hardly a surprise as we mentioned that it would be wise to look at R3 and as it had just moved from 2625 to 2630 a closing price between the two is about right.
The ratios are weakened above the zone and stronger below it, witness the two DR levels, but R3 is getting very punchy even for the mighty Dec expiry.
Range: 2605 to 2630 or 2630 to 2645
Activity Moderate
Type: On balance bearish
[affilinet_performance_ad size=468×60]
A static NZ for a change in the NDX but today could be the defining day for this index.
The reason why we suspect this is we pointed out how important Y2 at 6400 was and this index got as low as 6385.32 yesterday which was actually down about 20-points.
It has got to be hard to go the other way when the other two indices are charging ahead to a 1% daily gain, so we applaud them for trying but also the fact that Y2 has held firm, and both of these factors are what raises our suspicions.
The ratios below the zone may look weaker but are actually stronger again, the addition of R1 may just give a false impression.
Range: 6325 to 6400 or 6400 to 6550
Activity: Moderate
Type: Bearish
[affilinet_performance_ad size=468×60]
As we said yesterday in the DJX “it looks like it is setting itself up to employ a different tactic, one that will in all probability involve an opening gap” which it did indeed.
This was 45-points which took it to 23625 and more importantly they followed this through as the low was 23617.
OK so the tax plan was back on the table which was what started this bubble back at the start of the year, but this was strike 5 and it is Dec, so R32 is not that extreme, although we would have expected this last week really, but this doesn’t necessarily mean this index has gone bananas again.
However, it doesn’t rule it out either, so today will be very informative as it should now act as it is in a ratio level it is uncomfortable with.
Range: 23600 to 24100
Activity: Moderate
Type: Bearish
[affilinet_performance_ad size=468×60]
Posted in Uncategorized
November 29th, 2017 by Richard
Tuesday was the day the FTSE diverged from the DAX and it was very apparent from the very start as this index hit its upper boundary at 7400 from the off and fought until it had broken through.
This only took 40 minutes but in the meantime the DAX had done a NZ bandwidth test.
This is where it wanted to be but it needed help (bank sector) and without which today it will be the real test of whether it can cope in R1, or wallow like before and slip back to the upper boundary.
All the while DR waits in ambush.
Range: 7400 to 7550
Activity: Very poor
Type: Bullish
[affilinet_performance_ad size=468×60]
The DAX started off like a caged animal as it came up against its upper boundary first thing, hitting 13053, then it sprinted down to the bottom boundary before recovering and all in the first 40 minutes.
After that it just camped out on its upper boundary and to us it looked like it had accepted its captivity so to see it finish above its zone, albeit by just 8-points, seems a bit out of character.
Incidentally this is the exact same close as on Friday, and in fact the first day of this expiry, Monday 20th Nov, the close was 13058, so it has been exciting but has in fact gone nowhere.
No change in any of the ratios so it is just down to desire (and the open of course).
Range: 12950 to 13050 or 13050 to 13250
Activity: Very poor
Type: Bearish
[affilinet_performance_ad size=468×60]
Posted in Uncategorized
