Category: Uncategorized
November 3rd, 2017 by Richard
Sincerely well done to the FTSE as it managed to close outside its zone for only the second time this expiry.
The previous extremis was on the 25th Oct when it closed at 7447.21, so literally by just 2-points.
However, yesterday was very well fought as it hit 7552.75 shortly after the rate announcement and then collapsed at least 50-points.
So, to claw itself back to the upper boundary and manage to still close above, albeit by just 5-points, was obviously hard won.
This will make the open crucial and then how it copes with being in R1 ratio having spent so long in zero ratio and all the while DR towers over it.
Range: 7450 to 7550 or 7550 to 7650
Activity: Good
Type: Bullish
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We mentioned yesterday about how the DAX might react and if it would find being in R2 uncomfortable, and it looks like it did.
The open was 13448 and with a multiplier of 50 that would put our range at 13400 to 13450 and the low was indeed 13405 and the high 13460.
However as what little ratio there was has collapsed, witness R2 dropping a massive 200-points, but possibly more concerning (?) is what R2 there is left is now only just above the threshold, so at this rate of decline it is almost as if it’s actually not there.
Clear skies indeed.
Range: 13350 to 13600
Activity: Very good
Type: Bearish
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Posted in Uncategorized
November 2nd, 2017 by Richard
SPX , NDX and DJX Ratio Table 2nd Nov 2017
So, it seems like the SPX is still being as sensitive although a bit more aggression is definitely creeping in.
The aggression comes from the open which gapped up 7.95-points to 2583.21 but more importantly this was above where the market thought Y2 was, at 2580.
Of course, we saw it had moved to 2585 yesterday so just when it thought job done it runs slap bang right into it only getting as high as 2588.40.
We did think this momentum would carry it through but evidently not, however it is still only Y2, which is now on strike 4, and this index is getting bolder.
Range: 2555 to 2605
Activity Poor
Type: Bullish
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It was definitely one of the stranger days in the NDX and for all intents and purposes it looks strangely like a bandwidth test.
We talk of multiples of 25 in the NDX and if one considers that it closed on Tuesday at 6248.56, so say 6250, then either side we are looking at 6225 and 6275.
As the low on Wednesday was 6224.58 and the high was 6276.66 it looks to us that it was testing where the futures activity came in either side, and probably more importantly how much there was of it, or in other words a bandwidth test.
At least now it knows, and if it goes back to one side or the other it generally means a breakout, otherwise we have the trading range although it should turn shy of any further tests.
Range: 6200 to 6325
Activity: Average
Type: On balance decidedly bearish
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The DJX is still slumbering with the smallest opening gap by far yesterday at just 0.28% but it is showing signs of beginning to wake up.
Interestingly the high yesterday was 23517 which was Y2 on Monday so although it is 2 days later there is still a small differential that goes to show it does retain a degree of sensitivity.
However, this on its own we suspect would not have done much without Y2 on the SPX acting as gang leader.
Again, it may have taken 5 attempts last expiry but eventually this index got past R3, so in reality the Y ratios should hold no fear at all.
Range: 22700 to 24000
Activity: Moderate
Type: Bullish
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Posted in Uncategorized
November 2nd, 2017 by Richard
FTSE and DAX Ratio Table 2nd Nov 2017
The FTSE managed a daily range of 45-points so it is certainly getting better, but just to highlight what we have been saying this week, the close on Monday was 7487.81, spooky or what.
Obvious the contrast between these two indices couldn’t be greater, with the CAC on London’s side funnily enough, but it did make us recall the headlines of the other day about London losing 75,000 Banking jobs, so it looks like we now know where they are going to go.
There has actually been a change in the ratios today with DR below the zone strengthening slightly, but activity sort of says it all and we still see this index as a writers’ one.
Range: 7350 to 7450
Activity: Poor
Type: Bearish
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We certainly didn’t see that coming in the DAX, or did anyone else that we know of.
We fully expected it to go past R1, which yesterday was at 13300, as that was on strike 3, but not R2, which was then at 13350.
The fact the market opened up 113-points at 13342, right on R2, and was past it in a blink, which put it in clear skies.
Once it was past there was nothing to stop it, and although today the ratios have slipped a bit the market still remains above the new levels.
The only thing we can add is that it may get like the NDX and treat this as “uncomfortable” (NB here the multiplier is 50-points) but if this level of aggression remains there is no ratio left to get in their way.
Range: 13400 to …..
Activity: Moderate
Type: On balance definitely bearish
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Posted in Uncategorized
November 1st, 2017 by Richard
It’s debateable whether the high in the SPX of 2578.29 yesterday was another test of Y2, we happen to think not mainly due to the lack of urgency evident at the time.
However, it is still on strike 2, it is still only a minimal ratio after all and most important of all it has slipped to 2585.
This may not seem much but if or when it goes there again and finds its not there then the empowering effect of this “success” can quite often carry it forward.
Interestingly R1 is now 2605 which was R2 on Monday so is still closer to that end of the scale and so will therefore pack quite a punch.
Worth noting is R3 is a very long way away, it only appeared on Monday, and the DAX only went up to R2 so these two are in a more similar situation than many may realise.
Range: 2555 to 2605
Activity Poor
Type: Bearish
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Yesterday in the NDX was near enough a perfect example of what we were talking about trading in an uncomfortable market.
So, it opened at 6241.88 which should make the daily range 6225 to 6250 and the high was indeed 6258.42 and the low 6229.15.
The fact it finished just below the level it couldn’t manage in real time is also an indication of where the next auction may well be as they try to “jump” to the next level.
Activity here was tantamount to “only just registered” which makes it pretty pathetic across all three.
Range: 6200 to 6325
Activity: Very poor
Type: Bearish
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Well we have the first DNR in the DJX for this expiry, although we did get a “only just” this time last week.
So, if it is the sleeping volcano then it is doing a brilliant job of disguising it.
Therefore, we must repeat what we said yesterday “Do not get fooled just because the DJX has been playing second fiddle for the last couple of days as this is the one index that has been lording it all this year and we doubt very much it is going to stop now”.
It is still in a 1300-point Y1 ratio bandwidth so 1% moves should be a matter of course.
Range: 22700 to 24000
Activity: Did not register
Type: N/A
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Posted in Uncategorized
November 1st, 2017 by Richard
At the risk of being accused of laden sarcasm in the FTSE at least it was a 33-point daily range, so they are trying to make it interesting.
Sadly no one in the derivative side seem to be buying into it and although activity is an improvement it hasn’t changed anything, or even look likely to.
Again, finishing so close to the centre of their zone is as neutral as one can get so no reason to change our view at all.
It is a shame as there is still some decent Y ratio below the zone and with that wall of ratio at 7650, where it jumps a staggering 3 levels, it is almost a travesty not to see this at least challenged, but it looks a writers’ expiry sadly.
Range: 7350 to 7450
Activity: Moderate
Type: Neutral
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Just to repeat what we said yesterday as this index was actually closed but that is definitely strike 2 in the DAX on R1 at 13250 as the high was 13255 on Monday, and it actually had a little nibble at it in the morning getting as high as 13246, so it knew what it was doing.
If it goes back today this would be strike 3, but R1 has slipped anyway and this has also pushed R2 out a notch as well.
This coupled with the strength in the ratios below the zone are both bullish, but as we mentioned R1 stopped this index in its tracks last expiry and it doesn’t look any more aggressive this time round, so it could just have to resort to tailgating it (like the SPX last expiry).
However, we should just mention the activity as although not dramatic it was very directional.
Range: 13050 to 13300
Activity: Good
Type: Bearish
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Posted in Uncategorized
October 31st, 2017 by Richard
Monday was a very good example of how critical the open is both here in the SPX and in the NDX below, but for different reasons.
Here the market opened down 3.32-points at 2577.75 but crucially below Y2, which is unchanged today.
So, the high here of 2580.03 was an early test of Y2 and just like on Monday the week before, it capitulated.
Evidently this reaction has left participants slightly confused as what little activity there was generated resulted in money coming off the table.
The ratios are weaker across the board which also doesn’t help, but please remember we are only talking about Y2 which is a minimal level of ratio.
Range: 2555 to 2595
Activity Poor
Type: On balance just fractionally not bearish
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The open in the NDX was also down just a few points, 3.67 at 6209.80, which as a percent is virtually unchanged.
And therein lies the difference as when this index fell down to 6202.53, or their Y2, it actually acted as support.
The real surprise for us was it blasting past 6225 (high 6250.85) as we should be seeing the kind of uncomfortable market that trades in-between multiples of 25 depending on the open.
So, both opens were critical, both different and then when the markets reacted to each individual Y2 level in different manners it seems to have just confused everyone.
Range: 6200 to 6300
Activity: Moderate
Type: On balance bearish
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Do not get fooled just because the DJX has been playing second fiddle for the last couple of days as this is the one index that has been lording it all this year and we doubt very much it is going to stop now.
However, we do still see signs of normality returning, either that or a guilty conscience, and we do not think that is even possible.
There has been a huge change in the ratios, which is just the loss of Y2 above the zone, but this just crystallises the fact that this index is in a 1300-point Y1 ratio bandwidth.
And that is not all as we are seeing 23200-23400 making a move to being the next NZ.
Last expiry when this threatened, and we can’t remember the last time this index deigned to visit its zone, but that just acted as the catalyst for the next leg up.
All in all, we just don’t see this index being quiet for much longer.
Range: 22700 to 24000
Activity: Moderate
Type: Bearish
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Posted in Uncategorized
October 31st, 2017 by Richard
It is looking increasingly like this expiry in the FTSE will be a repeat of September’s, in other words remaining zone-bound.
There was news out there so it could have done a bit more than a 29-point daily range, but it is obviously happy being in its zone and as neutral as it can get.
No change in any of the ratios today and activity is as becalmed as the market, but at least it is a conventional 4-week one so not long and of course next up is the mighty December expiry.
Range: 7350 to 7450
Activity: Very poor
Type: Neutral
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That is definitely strike 2 in the DAX on R1 at 13250 as the high was 13255 yesterday.
Actually, it had a little nibble at it in the morning getting as high as 13246, so it knew what it was doing.
If it goes back today this would be strike 3 but it has slipped anyway and this has also pushed R2 out a notch as well.
This coupled with the strength in the ratios below the zone are both bullish, but as we mentioned R1 stopped this index in its tracks last expiry and it doesn’t look any more aggressive this time round, so it could just have to resort to tailgating it (like the SPX last expiry).
However, we should just mention the activity as although not dramatic it was very directional.
Range: 13050 to 13300
Activity: Good
Type: Bearish
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Posted in Uncategorized
October 30th, 2017 by Richard
And decide the SPX certainly did with the help from certain results putting in the sort of day that is all too rare nowadays.
It was still less than 1% and these moves were commonplace just last year.
Anyway, it finished the week where it went at the start but with a high of 2582.98 there is no doubt this was a test of Y2, and the close above it is significant, making the open critical.
Activity suggests that involvement was reluctant at best but at least the market is now challenging some ratios so this should stimulate something or someone we hope.
Range: 2555 to 2595
Activity Moderate
Type: On balance only just bearish
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Well we certainly got that one wrong as we were still crunching the derivative numbers in the NDX when the results were coming out on Friday.
In our defence we only look at the derivatives so this is not something we would take into account anyway, so when this index opened up 100.36-points at 6138.23 it blew our target of Y2 below the zone right out of the water.
Immensely ironic the close was actually right on Y2 above the zone, so it galloped all the way up through Y1 without a care.
It is a shame the DJX didn’t put on just a few more points than all 3 would be on their Y2 ratios, but this makes here and the SPX’s opens crucial.
Range: 6100 to 6200 or 6200 to 6300
Activity: Very strong
Type: On balance bearish
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Very unlike the DJX to play second fiddle but that is exactly what it did on Friday.
So much so in fact it never even went close to a test of Y2 at 23500 only managing to get as high as 23449.
There are no changes to any of the ratios and little activity so it is just a wait and see situation here.
Although, it may be wise to remember that they are in an 800-point Y1 ratio bandwidth should a bit of volatility return, let alone normality.
Range: 22700 to 24000
Activity: Moderate
Type: Bullish
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Posted in Uncategorized
October 30th, 2017 by Richard
The FTSE had every opportunity to follow the lead of almost every other index but chose to hibernate around the middle of its zone.
Considering last Monday when it tested the upper boundary (high 7542.00) and on Wednesday it tested the lower boundary (low 7437.42) so it definitely knows what’s where.
The only conclusion we can draw is that it has retreated back into its shell like the September expiry where over the 4 weeks of that it only ventured out of its zone on the very last 2 days, the grey area.
Range: 7350 to 7450
Activity: Moderate
Type: Neutral
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The high of 13249 in the DAX just does not do justice to how hard it fought with R1 on Friday.
Not forgetting that on the Thursday (high 13144) it had to do battle against Y2 so it had already come out fighting opening up 53-points but more importantly above 13150 at 13186.
There were at least 5 tests of R1 and 4 were very noticeable spikes.
More importantly today and R1 is still there so watch out for the open, and with R2 strengthening it is now backed up with the last level of ratio, so today will be crucial.
Don’t forget last expiry when it hit R1 it just stalled and basically stayed at 12900 for the remaining 3 weeks.
That’s probably the best outcome because the corresponding R ratio is still a very long way away at 12650.
Range: 13050 to 13250 or 13250 to 13300
Activity: Average
Type: On balance just bullish
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Posted in Uncategorized
October 27th, 2017 by Richard
SPX , NDX and DJX Ratio Table 27th Oct 2017
Judging by what happened yesterday in the SPX then Wednesday was indeed the decider, for now at least.
They opened up almost three points and hardly took a backward step further consolidating the previous close above their zone.
The ratios continue to strengthen below the zone, which is one out of the three bullish signs, but activity suggest apathy rather than involvement.
However, we now know the market knows where Y2 is from Monday’s test and also where their zone is from Wednesday’s test, so all it has to do is decide which way it wants to go, simple really.
Range: 2555 to 2595
Activity Moderate
Type: On balance definitely bearish
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Wednesday wasn’t the decider for the NDX yesterday was.
We claimed yesterday that on Wednesday we got both the breakout as well as the close inside its zone but explained the close was due to the actions of three other indices.
Yesterday there was no hiding as it got as high as 6066.51 after a virtually unchanged open but just could not consolidate retaining its hold within the zone, which is not good news for the bulls.
Furthermore, one may remember our step-up level here was 6050 which is also the bottom boundary, so a double whammy.
The next stop should be Y2 then.
Range: 5975 to 6050
Activity: Average
Type: On balance just bearish
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Was yesterday further evidence of the DJX returning to normal?
Actually, we honestly hope not because there is so little ratio around and if it did it should head straight for its zone, and although we don’t believe in “crash-ups” we also don’t like “crash-downs”.
Anyway, and as you know we don’t believe in coincidence either, but yesterday Y2 was at 23400 and that is exactly where the market closed, hmmm.
Y2 has slipped a bit today but this index is not about fundamentals or derivatives, as every other index is currently working out where they want to be in context to their respective zones but the DJX is noticeable by the fact it is not, so therefore the deciding factor here will be normality and the return thereof.
Range: 22700 to 24000
Activity: Good
Type: Bearish
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Posted in Uncategorized
