Nb. Our comment for 19/03/24
Again, before we get onto April a quick recap of the March rollover and expiry.
You can see last weeks comments below and, in our defence, it was a weird expiry from the very start, what with absolutely no Y ratio at all. To compound that, the lowest level (apart from the zone naturally) was R2.
Anyway, 5180 was still a step-up level despite R3 having moved to 5205, and it capped most of the action last week. The intraday highs on Tuesday, Wednesday and Thursday were 5179.87, 5179.14 and 5176.85 respectively. The closes on those days were in or around 5150 significantly.
However, the zone held steady despite all this, so at the final reckoning the settlement price of 5101.67 seems a bit like a compromise in the midst of the R2 bandwidth.
This was probably the best it could do having had to play the hand it was dealt coupled with the fact that despite trying its hardest, nothing really changed throughout.
At least in April we have the return of some Y ratio. However, if you compare how much there was back on the 12th to how much is left today, then we wonder how much longer it will last.
Please note also, that it is Y2, there is no Y1.
The good news, if you are a bull that is, is with the ratios building up underneath the zone then this is how it should be to give it the impetus to move upwards.
Until it does however, there will always be that risk of the market visiting it where it is.
This makes 5155 quite a significant level, and also why we believe yesterday’s close just below it is no coincidence.
Defining moment already for the SPX in this new 5-week expiry it seems.
Please note also, that last week R1 was at 5205, so this now becomes an important step-up level.
Range: 5005 to 5155
Activity: Poor
Type: On balance only just bearish
www.hedgeratioanalysis.com
Nb. Our comment from the 12/03/24 (NB. The March expiry)
It really was all about the ratio levels we mentioned last week.
On the Tuesday, R3 at 5130 was obviously just too much for it, eventually finishing down 52.30-points.
The intraday high on Wednesday of 5127.97 just went to show that 5130 was still a level of resistance.
After that, and again we mentioned that we didn’t expect it to hold for very long, our next level was 5155. The intraday high on Thursday was 5165.62, so bit of an overshoot, but there was an awful lot of activity during the day at 5155.
On Friday, R3 had slipped again to 5180, and the intraday high was 5189.26.
Since that high the SPX did retreat 100-points, intraday low on Monday was 5091.14, which sets it up nicely for the grand finale, namely the rollover and expiry.
As you can see in the ratio table there have been further movements in the ratios.
Most notably, R3 above the zone now resides at 5205, giving plenty of room now to resume its upwards march towards continually knocking on R3’s retreating door.
Although, 5205, should hold for today and quite possibly tomorrow as well.
However, the really big question is whether or not the zone is going to move, as 5000 is still a long way below the current market.
We do see 5145-5155 as making an effort but, it still has a long way to go and just 3 days in which to do it.
Part of the problem has been a huge increase in activity yesterday and today and, although rated as moderate, as this is a triple that is actually very impressive.
Perhaps more significantly, on both days it has been classed as neutral.
This doesn’t actually help, as it basically means there are as many bulls as there are bears so, you are looking at a 100-point move, just there are no clues as to which way. Although, historically, continuing to batter R3 does seem to be more common than not.
Range: 5005 to 5205
Activity: Moderate
Type: Neutral
www.hedgeratioanalysis.com
