Well we certainly got the breakout in the NDX as expected after their NZ bandwidth test on rollover Wednesday.
The fact it was so explosive leads us to believe that the market was indeed being held back in its zone for the rollover and once that was done just like an elastic band it snapped back.
We did say in our forecast this was the hardest to call and especially so as there was so little ratio present anyway, in fact so much so we were talking about the step-up levels from the very start.
That first Friday saw this index put on 175.60-points (no ratio of course) and from then on it was a war of attrition with Y2 and above until the zone came a calling.
In the end we were right to recognise the situation and we were pleased by the finish but this index was definitely where the aggression was.
Range: 6275 to 6425
The beauty of having a proper rollover like November in the NDX is that it releases the grey area from any unfinished business and so it can go as mad as it likes.
The reason that this is a good thing is that it not only lets the market “let off steam” but can very often provide opportunities in the following expiry.
Or to put it another way, not leave it wallowing in an ocean of no ratio and if there is some dynamic delta hedging from the start it engages everyone, although having just said that activity has literally gone from feast to famine.
Range: 6025 to 6325 or 6325 to 6475
Activity: Only just registered