For once the SPX is below its zone come expiry.

The market drags the SPX's zone back to its starting level.


Nb. Our comment from the 01/11/22


Looks like the door was Y2.

Which was slammed shut very unequivocally. So much so, being above 4800 seems a distant memory now.

What did surprise us however, was the fact that 4805 has held onto being Y2, although it did slip on the 6th to 4810 it recovered the very next day and has since quietly strengthened.

This is not that pertinent at the moment as the last five trading days have been all about the zone.

The -92.96-point fall on the 5th took this market right into the safety of the middle of its zone, 4700.58. The next day the market meandered 20-points either side of its zone, before eventually finishing back in it for the second day.

This made Friday quite the important day, as above the zone the bulls are in charge, whereas below it and it is the bears. In the end it closed below it, but not after an intraday high of 4707.95, giving that upper boundary one more test for good measure.

And with Monday also closing below the zone we would normally say that the decision has been made, making the first line of support the corresponding Y2 below the zone, currently standing at 4570.

Our only misgiving is that the intraday low on Monday was 4582.24, which considering was a fall of 94.79-points inflating the vega, is close enough under these conditions to count as a hit. So, basically, has it done it already?

Either way it is certainly going to make for an entertaining end to the Jan expiry we think, and it could just turn out to be a very original finale as well, as it has been a very long time since this index has been south of its zone when the sharp end of the expiry comes about.

For the record the Y1 ratio bandwidth has returned to the 235-points we were used to seeing for the first few weeks of this expiry.


Range:            4570  to  4695           

Activity:          Moderate

Type:              Neutral


Nb. Our comment for 01/20/22


Hopefully you saw it as soon as you looked at the above table, but the big news is that the zone has returned to its starting point of 4595-4605.

Hugely significant, and not just for the fact it has fallen, which is a bearish sign in the same way that a rising zone is bullish.

It was also the fact that the previous Monday, the 10th Jan, this market had tested Y2 at 4570 before staging a remarkable recovery. A recovery that took it back above the then zone of 4695-4705 for a couple of days. So, the bulls were evidently not spent yet.

However, dropping back below 4700 on the Thursday and Friday was the first indication that the bulls had run out of steam and that the bears were flexing their muscles. And, it was into this scenario that the zone dropped.

So, it looks like we are going to get that recent rarity, an expiry where the zone is actually above the current market level. In fact, so rare of late, they have probably forgotten what to do or how to act.

And, if there was still any doubt as to who is in charge, the market actually closed deep into the fallen Y2 level of 4545.

Worth noting is that when Y2 was still at 4570 the intraday low on Tuesday was 4568.70.

Don’t forget all these problems started when this index messed with Y2 at 4805 in the second week of this expiry, and doesn’t that seem like a very long ago now.

There is still a day to go, but essentially time has run out. So, we feel that this market would be doing very well in our estimation just to get the settlement price in the Y1 ratio bandwidth.

Although, there is a lot of finger-crossing that we might see this index finish in its zone, as that would give us the perfect expiry. Being from one ratio level, in this instance Y2, all the way back to the corresponding one on the other side of the zone before reversing once more to finish in said zone. If you do get these turning points right, it can turn a 5% trip over the length of an expiry into a 10% one, which annualised is “fair dinkum” as they say.


Range:            4445  to  4545        or        4545  to  4595           

Activity:          Moderate

Type:              On balance only just bearish


Available to buy now

The faction account of the Big Bang, The Great Storm and the market crash of 1987, available in eBook and paperback here, a must read if you don’t believe in history repeating itself.

January 20th, 2022 by