Category: Uncategorized
August 25th, 2017 by Richard
No changes in the SPX ratios today but at least we have seen the return of more usual activity.
Again today 2420-2430 is looking less likely to assume the NZ mantle but it is still a threat and until this is decided we can’t see this huge bandwidth of Y ratio below the zone changing.
Including all the Y ratio this bandwidth is still 75 points and to put that into perspective in a normal triple expiry we consider ourselves lucky to see any, particularly in the two huge ones, Sept & Dec.
So when it starts waking up this index will really motor.
Range: 2410 to 2470
Activity Moderate
Type: On balance only just bearish
And in one fell swoop the NDX changes sides and joins the DJX in being above their respective zones and therefore into bullish territory, although it may take another day or so for this to be realised.
This is because the NZ has indeed changed but out of the three this has holding up their activity levels so this always helps.
However this doesn’t really change too much as the market is still in a huge Y1 ratio bandwidth, so really we should be getting 1% + daily moves.
Although one very significant change is that it catapults 5825 into the limelight making it a very significant level, in the exact same way 21600 is to the DJX.
Range: 5825 to 6000
Activity: Very strong
Type: On balance bearish
Again no change in any of the DJX’s ratios although that is no surprise considering the activity didn’t manage to even creep onto our scale.
Again there is an awful lot of Y ratio present in this index for a triple expiry so as and when it gets agitated it will move.
Perhaps worth reminding that Monday saw a solid bounce off 21600, but if that level gets tested again and breaks then there is 200 points of no ratio at all below it.
Range: 21600 to 22400
Activity: Did not register
Type: N/A
Posted in Uncategorized
August 25th, 2017 by Richard
Yesterday we said the FTSE “seemed happy to be in neutral” by which we meant the NZ, or Neutral Zone or just plain zone, and it evidently was.
It did manage a decent rise but that is easy where there are no ratios at all to get in the way, but the fact it avoided testing the upper boundary, only getting as high as 7437.87, to us shows it is happy to go up but it isn’t going to pay or fight for the privilege.
Finishing close to the middle of its zone just confirms our view but this was courtesy of losing a rather impressive 13.34 points in the auction, so perhaps people are warming up.
Range: 7350 to 7450
Activity: Moderate
Type: On balance not bearish
The DAX is acting like a caged animal, and great to see it being so aggressive and at least trying to break out.
And breakout is the operative word as this is now a double NZ bandwidth test or a test of both boundaries in the same day on two consecutive days. Great trading if you are alert to it.
The high was 12254 and you don’t get much closer than that on a twelve thousand point index, with the low coming in at 12169.
The fact it has so much Y1 ratio just above the zone makes us wonder if they knew they might just give it that extra push.
Anyway not only a bandwidth test *2 but this would also be strike 3 either end so hang on tight.
Range: 12150 to 12250
Activity: Moderate
Type: Neutral
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August 24th, 2017 by Richard
SPX, NDX and DJX Ratio Tables 24th August 2017
With the SPX dropping 7.63 points at the open we thought we might be in for another decent move but it all went rather quiet.
The confusion over where the NZ really wants to be does not help but the end result today is a lot of money coming off the table and considering we are just at the start of this expiry this is rare, but does explain the lack of enthusiasm.
Today it seems the NZ has no intention of moving which may help to clear the picture up, and we even see the appearance of R1 below the zone just to highlight this, but at the end of the day this index is still in the middle of a very wide Y ratio bandwidth, which is quite exceptional for a triple witching expiry.
Range: 2410 to 2470
Activity Moderate
Type: On balance only just not bearish
All the NDX had to do was open up a couple of points to get back into its NZ but it was not to be as they opened down 31.17 points.
The issue may well be the fact that the NZ looked like moving to 5775-5825 yesterday and today we don’t quite know how it is not, so the merest twitch today should see it move.
The more interesting aspect of this move would be it means this index is changing sides and would join the DJX in bullish territory (market above the NZ) leaving the SPX as the one remain bear, especially so now their NZ is looking less likely to change.
No wonder the markets don’t know which way to turn as they probably don’t even know what side they are on currently.
Range: 5625 to 5875
Activity: Moderate
Type: Neutral
No change in any of the DJX’s ratios and at least there is still some activity going on here.
Although when we say at least that is in all senses as it only just made it onto our scale it is so low.
The realisation of being in a triple is probably now sinking in which is a good thing as now everyone know what and to what extent they have to do it to achieve their goal.
Range: 21600 to 22400
Activity: Very poor
Type: Bullish
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August 24th, 2017 by Richard
FTSE and DAX Ratio Table 24th August 2017
The environment was not so benign for the FTSE yesterday but it still showed a very interesting degree of resilience.
Having got above the key level of 7350 and back into its zone it could easily have given some or even all of it back with no support coming from the US, but it didn’t and more than that it didn’t even test the bottom boundary.
This is all very good but if the bulls were that adamant they also had an opportunity to go up, which they singularly failed to do, in stark contrast to the DAX, so happy to be in neutral it seems.
Range: 7350 to 7450
Activity: Moderate
Type: Neutral
The DAX yesterday morning certainly tried to take advantage of the strength on Tuesday from the US.
Very early on it raced ahead to 12269 taking on its NZ’s upper boundary at 12250 and it obviously wasn’t expecting any resistance judging by how it acted.
It drifted for the rest of the day but an hour before the close it hit its bottom boundary at 12150, getting as low as 12155, and as obviously relished the support it found there.
So unlike London here at least they tried and have managed a NZ bandwidth test at the end of the day so expect a breakout today.
Range: 12150 to 12250
Activity: Poor
Type: On balance bearish
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August 23rd, 2017 by Richard
With the SPX being in the middle of such a wide Y1 ratio bandwidth big moves should come as no surprise, to those whom follow the ratios of course.
However it seems the market itself has been taken by surprise as activity is what can only be described as the bare minimum without qualifying as a “did not register” and at this stage in an expiry which is also a triple then this is rather odd to say the least.
Of course adding to the confusion was not one but 2 levels signalling their intent to become the next NZ and the fact that neither has.
This has changed today with 2420-2430 now way out in front with the finish line in sight, although this is very probably not what the market wants to see.
Range: 2395 to 2470
Activity Very poor
Type: Neutral
We have placed the NDX inside its NZ even though it is still 1.67 points adrift of it but after yesterdays huge performance we thought this might be just a little mean, and it does better reflect the whereabouts this index is in relation to the ratios.
Of course depending on the open but even a small positive one would give it 50 points of zero ratio immediately above it.
Although activity has slipped back there are still no major changes in any of the ratios, so this is becoming rather a concern now, as is the fact there is no masking 5775-5825 is definitely making a play to be the next NZ.
Range: 5625 to 5875 or 5875 to 5925
Activity: Moderate
Type: On balance bullish
If anything for the DJX it is more applicable here than what we say in the SPX basically because this index is in the middle of an 800 point Y ratio bandwidth.
Furthermore Y1 appearing in the middle of it throws up the possibility of the NZ here moving to 21900-22100, in total contrast to the direction the SPX’s is likely to move.
The only thing for certain is when this index hit 21600 on Monday the support given by the top boundary of the current NZ was more than enough to stimulate the bulls into rallying 300 points, so they are certainly keen but it could boil down to whether or not they are willing to be in the fight on their own?
Range: 21600 to 22400
Activity: Poor
Type: Bullish
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August 23rd, 2017 by Richard
To be fair we are probably being greedy expecting the perfect start in the FTSE with a test of R2.
It seems the US got there first and forced the pace here, but otherwise the direction and change in the NZ are all going as forecast.
However it is worth pointing out that getting above 7350 was a very hard fight here which took almost the entire day so it’s not all plain sailing.
But now it is back inside its NZ then there are clear skies all the way up to 7450, and of course the Y ratio that was below has now moved above the new zone, so there is still a lot of potential here.
Range: 7350 to 7450
Activity: Poor
Type: Not bearish
Just like London the DAX came close to testing its “very significant” level, coincidentally R2, but events in the States seems to have overtaken them.
Although both are now back inside their respective zones and both still have a considerable amount of Y ratio still above them without a bounce off these respective support levels there remains a degree of doubt over how much bullish momentum there is.
The next test will be how both now cope with their zones, especially the upper boundary which will provide their first taste of resistance.
Range: 12150 to 12250
Activity: Poor
Type: Bullish
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August 22nd, 2017 by Richard
Again the SPX tested its Y2 ratio, this time getting as low as 2417.35 before recovering, however we do feel that this was more to do with the DJX and 21600 (see below) rather than this index so it is perhaps not as solid as one may think.
Nevertheless that is strike 2 so we wouldn’t expect it to hold for a third time anyway.
Hardly any changes in the ratios so being in a 75 point Y ratio bandwidth all we can say is expect volatility and whipsaw.
That is unless it drops down to test R2, it holds, and generates bullish activity and momentum.
Not so much today but 2445-2455 and 2420-2430 are still threatening to be the next NZ.
Range: 2395 to 2470
Activity Moderate
Type: On balance bearish
Rather perturbing considering the level of activity but there has been no further development in the NDX ratios today so this index is still stuck inside a massive Y ratio bandwidth.
Therefore just like the SPX above all we can say is under these circumstances expect volatility and whipsaw, or more of what we saw yesterday.
There is however one interesting development which is 5775-5825 is making moves towards being the next NZ, although we suspect this is not so much by design but rather where the market seems to be entrenched and the fact it was very low ratio to begin with, but it would mix things up nicely for sure.
Range: 5625 to 5875
Activity: Very good
Type: Neutral
As we said yesterday in the DJX “21600 is going to be a key level” and so it proved with the low of 21600.
Actually it approached this level with some caution but when it did eventually attack it was repulsed rather thoroughly, so most definitely strike 1.
We say that as the rebound only took this market as high as 21718 which is not the sign of a rampant bull market, rather one that we call “in an uncomfortable ratio position”.
Therefore the open will be crucial in determining which 100 point bandwidth it is likely to trade in until one or the other decide to force the issue, or of course unless the ratios change.
Range: 21600 to 22500
Activity: Poor
Type: Bearish
Posted in Uncategorized
August 22nd, 2017 by Richard
The good news is that the NZ has changed in the FTSE and without delay which is always for the best.
This has indeed altered the complexion of this expiry and if it wasn’t for the appearance today of Y2 at 7300 it would have flipped the entire Y ratio above the new level.
However it still leaves this market below it and therefore still in bear territory but R2 is still a critical level and now of course the significance of 7350 becomes very apparent.
Range: 7250 to 7350
Activity: Good
Type: On balance only just bearish
The DAX set its stall out early with an open down 60 points at 12105, this was also significant as from the off it took this index below the bottom boundary of its NZ.
It is also worth mentioning that Y2 was at 12100 yesterday and the low was 12021, not to mention the close.
Therefore even though Y2 has slipped to 12050 we do not think that this new level will offer much support, but it could be a totally different story if this market does manage to test R2.
Range: 11950 to 12150
Activity: Moderate
Type: On balance bearish
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August 21st, 2017 by Richard
Friday was really all about the Dow and its zone but we did notice that here in the SPX the low was 2420.69 which is actually bang on the Y2 ratio level, and don’t forget this index had already had its day getting back to its zone for the rollover.
Y2 may have been enough for it in August but we suspect the mighty Sept expiry will take a bit more than this.
Therefore it is worth noting that at the bottom of our range the ratios jump an entire level so it will be a very good test for this expiries sensitivity.
Otherwise the main aspect to note is that there are 2 levels making noises towards being the next NZ, 2445-2455 and 2420-2430, but, and very much like Europe, it is obvious from the table there is a lot less ratio above the current market level than below it which should go a long way to offsetting any weakness in the zone.
Range: 2395 to 2470
Activity Very good
Type: On balance just fractionally bearish
The NDX is acting very similarly to the SPX in that it held onto its zone for the rollover then once this had been achieved and this support removed it fell back and now both start the Sept expiry a considerable way below their respective zones.
However unlike the SPX here they are in the Y1 ratio bandwidth that stretches a lot further down, and then only if it remains sensitive to Y2 in a big expiry as the R ratios are still a way below this.
Therefore we think it will have to rely on the others for direction and we will just have to wait and see if the big players come back as they will have a bloody nose from August and being a triple they might not be so keen anyway.
Range: 5625 to 5987
Activity: Good
Type: On balance just bullish
Don’t forget in August the DJX’s NZ was 21500-21700 so as it closed at 21674 that was one of the more remarkable achievements for this index.
Of course here in September it is slightly lower and also a little bit more entrenched so it’s just a question of whether this flight to the zone will continue or will it revert to just ignoring it again.
In contrast to the SPX here it is still possible we may see it move upwards to 21900-22100, although today this does not look as likely.
It certainly has plenty of scope and being in a very wide Y ratio bandwidth that is only going to help, but 21600 is going to be a key level.
Range: 21600 to 22400
Activity: Moderate
Type: Bullish
Posted in Uncategorized
August 21st, 2017 by Richard
For the FTSE September starts with its NZ 100 points higher than it was in August but we do feel that this will change and it will move down to 7350-7450.
The timing of this move is critical as it will totally change the complexion of this expiry so really the sooner the better.
However as it stands a quick test of 7250, where it jumps a complete ratio level, would be very useful in determining this expiries level of sensitivity, and as it is a triple then we would anticipate this level here as being the minimum.
Also as it will start in R1 ratio then it will be used to this level so it shouldn’t be more than a speed bump as this expiry progress that is if the zone doesn’t change immediately.
However just a quick glance at the table above will reveal that currently the market is a great deal closer to some significant ratio support levels while the corresponding resistance ones are a long way above it.
For the record the last expiry the FTSE started it at 7452.91 and finished it at 7323.98 for a loss of 128.93 (1.73%) points although it traded between its R1 ratio levels giving a total range of 250 points.
Range: 7250 to 7450
Activity: Moderate
Type: Bullish
Welcome to the DAX September expiry and hopefully it will have a bit more action to it than Augusts’ which was almost the mirror image of this one.
This was actually a result as it could have got very messy but seemed quite content to bounce off R1 and in the end from the close on the 21st July (12440) to the expiry on Friday (12165) this index lost only 75 (0.60%) points.
We very much doubt this expiry will be so sensitive but on the downside it goes straight from the Y ratios to R2 at 11950 so if it goes there this will prove to be a very significant level.
And as you can see from the table the corresponding ratio level does not appear for a very long way and it is also only as high as it goes so it certainly has the potential to be a cracking expiry.
Range: 12150 to 12250
Activity: Average
Type: On balance only just bullish
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