Looks like we got our “crash-up”

Well we have definitely now had our "crash-up" in the SPX.

Nb. Our comment from the 06/05/20


We did mention on twitter yesterday that the ratios have continued to collapse above the zone, and that R1 was now 3080, but, more importantly, R2 was 3130.

We say “more importantly” as a couple of hours after we had posted this, the market hit 3128.91, and then proceeded to retract all the way to 3090.41.

The bulls fought back to fashion a decent close, which is unsurprising considering how weak the ratios are.

Which is sort of why we have posted this today, just two days since our last, because, as you can see in the above table, the ratios continue to recede.

R1 is now 3085 (minor change), but R2 is now 3155, which is a significant change.

Furthermore, we would be very surprised if the zone didn’t jump again, to 2995-3005.

And still two more weeks to go.

Again, we don’t fault the market, as it is only doing what is expected of it where the ratios are concerned.

However, we take great umbrage with the authorities, as they, and yes, they are the responsible party here, have fashioned the same exact market conditions that led to the 35% correction of just two months ago.

At the end of 2019 and up to March we kept on saying that the market keeps “knocking on the R ratio’s door” without ever glancing backwards and noticing the abyss of little or no ratio below it, providing support.

As it is challenging R2, then please note the corresponding R2 level does not kick-in until 2745, and, just like before, if this market drops 410-points (13%) then we rather doubt R2 will be enough to stop a market with that much momentum behind it.

So, for us, just like last time, the only question is when?


Range:            3085  to  3155         

Activity:          Poor 

Type:              On balance only just bearish


Nb. Our comment for 06/10/20


The ratios continue to give way above the zone, but, at least at the moment, the rate of change has slowed considerably.

And, although it doesn’t show it in the above table, below the zone, 2895 had gone up to Y2, but has since fallen back to Y1.

Nevertheless, recently it has all been about this index taking on R2 and above, just like it was before coronavirus, BC if you like.

On Monday 8th June R2 had slipped to 3180, and R2 to 3330, but on that day, this index pushed ahead to an intraday high of 3233.13, deep within the R2 ratio bandwidth.

Under “normal” market conditions this would be perfectly usual behaviour, and this being a triple, we would actually consider it quite restrained, but these are very far from normal, and this is our concern.

Basically, the strength in this market we attribute to the fact the ratios are still reflecting markets BC, and as we said, “are just as susceptible to a crash-up”.

But that was to a zone stranded way above the then current market, and to take advantage of the ridiculously wide Y ratio bandwidths.

For this, or any market for that matter, under present conditions, after disaster if you like, to take on R2, or higher amount of dynamic delta futures selling, with an abyss below it, is QE-fuelled madness, again.

We can see why it is happening, but we really don’t think it is clever or sensible.

At the end of the day, the market hasn’t changed, but the world, economic and environmental, has, and why it is ignorant of these facts, as is the regulator, is a mystery.

Beware, there is now a 300-point Y ratio bandwidth below this market, so for goodness sake, nobody say; “boo”.


Range:            3105  to  3205        OR        3205  to  3355         

Activity:          Poor 

Type:              On balance just fractionally bearish




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June 10th, 2020 by