Fearless SPX

Nb. Our comment from 07/03/19

Well, the “great unknown” has been answered as the intraday high here was 2977.93.

Back on the 25^th June R1 was standing at 2970, and today it is 2980, so on Monday the 1^st it was probably about half way between the two.

Therefore, we see that as a test of R1, not a breach.

Otherwise, it is looking good, as the zone looks set to move up to 2920-2930, obviously the ratio above the zone are moving out (hence the R1 drift), and as you can see in the table above, they coming in below the zone.

All three are bullish signs.

So, the only problem, is are the bulls that committed that they will buy all those futures forced onto the market through the dynamic delta at R1?

And, now R2 is back to 3005, it is less than 1% above R1, so two hurdles very close together.

The cynics might say, yet another record high on the 4^th July, and it happens more often than not, so it’s a tough one to judge, as historically, when so many are away from their desks, it can get a little out of kilter.

But, R2 was enough to stop the triple witching June expiry, both as support and as resistance, so we have to say it should prove too much for July.

And, despite the ratios coming in below the zone, the R ratios down there don’t even start until you hit 2820, and that’s a very long way away indeed.

Range:            2905  to  2980

Activity:          Moderate         

Type:              On balance only just bearish

Nb. Our comment on 07/11/19

Well we got the move up in the zone, and a bit higher than expected as well.

Well, it is higher now, but it is extremely likely that 2925-2930 was a stepping stone, just between our publications.

So, all three bullish signs remain in place, upwardly mobile zone, strengthening ratios below the zone and weakening ones above it.

But, so does the fact that the nearest corresponding ratio below the zone doesn’t appear until 2845, almost 150-points away.

But compare the two tables above, and from a ratio stance, nothing at all has changed, as it has been the ratios that have shifted rather than the market itself being the aggressor.

Regarding the ratios it is worth pointing out that the type is very adamant, and because we can see the actual numbers, we can say it is all very one-sided indeed.

So, all we can say, is go with the flow, but keep your stops very tight, as when a market get fearless like now, and with the rollover next week, just the slightest scare could have enormous effect. Well, a 150-point effect anyway.

Range:            2955  to  3005           

Activity:          Moderate       

Type:              Bearish