Nb. Our comment from the 03/17/21 (Not published)

Nb. Our comment for 03/24/21

These expiries all seem to morph into one these days it seems.

The March expiry, a triple, looked more like an intermediary, and this, the intermediary April expiry, looks like just a slightly scaled down version of March.

The similarities are the zone, both being 3895-3905, and the still gargantuan Y ratio bandwidths.

At the end, in March, the Y1 ratio bandwidth was 235-points and Y2 was 360-points, while here in April they are 210-points and 385-points respectively.

Whether or not the sensitivity to Y2 returns remains to be seen, but we suspect it will, as it took until virtually the rollover week for March to even test R1.

Perhaps having a 10% Y ratio bandwidth is the new normal, who knows, but if it is, we can’t find one logical reason for it.

For reference, at this exact same point in 2019, the Y1 ratio bandwidth was 60-points, and Y2 100-points, and which at that time was considered wide.

The point is, that despite recent all-time-highs, the ratios below the zone are not filling in, which is a sign of bullish intent.

In over 20-years previous highs have come about because of the ratios below the zone have been rising, building pressure, while above the zone they have been retreating, creating space.

This is not happening this time, and abnormality is always a concern, but with $5trln worth of spending washing through the system it could just be a coincidence that the total market cap in the last 12 months has risen by just about that.

But with no ratio around, the volatility we have been seeing recently could just be a precursor.

Range:            3905  to  4005           

Activity:          Poor

Type:              On balance bearish