DJX Aug to Sept Rollover 16th August 2017
The only change in the DJX today is above the zone R1 moves up to R2 which highlights the 2 main aspects here.
Firstly the zone and although this index had its bullish hat on from the very start, reminding us of the 1st quarter this year, it has steadfastly refused to go anywhere near it so the fact it is so far above it remains a risk, but under the circumstances a small one.
Secondly it seems the press, or fourth estate, are making a big thing out of 22000, the big figure, whereas for us it is just part of the Y2 ratio bandwidth, but 22100 now it is R2 is a different story and remember what happened the last time it encountered this ratio last week when it was at 22200.
Range: 21700 to 22100
The really big question is whether or not the bulls will be as adamant in the mighty September?
There is a very valid argument that they can use the sudden explosion of activity that comes naturally with the second biggest expiry of the year as justification or even validation of their view.
However with such a huge increment in the ratios in this expiry we can’t see the NZ budging so for us it will all boil down to how much the blinkered bulls are willing to take on the dynamic delta hedging.
Range: 21600 to 22400
Activity: Very good
Type: On balance only just bullish