Nov zone lottery for the SPX.

The story may change when the Dec expiry starts to weigh on the SPX


Nb. Our comment from the 11/10/20


Indeed, it certainly wasn’t gentle.

More to the point, who knew Pfizer was developing a vaccine? You did! Why didn’t you say? Sorry, what do you mean they have been shouting about it from the rooftops for several months now? And, what, how many others? At least a dozen more vaccines, really! Who knew? …Everyone it seems.

This is not meant to be facetious, but deadly serious.

As please refer to our first comment on this expiry, back on the 21st October, when we alluded to the similarities with the previous expiry, and on the 28th we actually said; “Don’t forget the last expiry, which went down to Y2 before reversing all the way back up to its R ratios, in a 10% or 350-point recovery. Nb. The purists would note if you caught the down leg at the start, that adds another 3% on to the 4-week total round-trip ride. Nice.”

Now, we have already seen the test of Y2, way down there at 3245, and courtesy of the “surprise” announcement yesterday, we have seen this index test R2, with the intraday high of 3645.99.

Please note, and as in the table above, R2 today is now at 3705.

So, down to 3245, which was from 3500 at the start of this expiry, is 255-points, then up to 3645 is 400-points, making a grand total of 655-points, or a massive 18.7%.

This is the way things are now, and as we have said many times in the past, the regulator needs to get a grip, as this is just not natural or beneficial, except, perhaps, to traders.

There is still a week and a half to go this expiry, and the ratios have returned to strengthening below the zone and weakening above it.

The zone itself could easily resume its upward trajectory, and all in good time for Thanksgiving.

For the record, the all-time high here was 3588.11, so it has achieved this already.

So, for us, the only thing that remains, would be to see this index in or around its zone, wherever that may end up, this time next week.


Range:            3405  to  3605         

Activity:          Moderate

Type:              Bearish



Nb. Our comment for 11/17/20


Pretty much standard stuff for the SPX these days.

Of course, there is no way of you knowing, unless we go back to publishing the ratios daily, how far the R ratios above the zone are retreating, but interestingly the market hasn’t even been back to test R1.

R1 was 3605 this time last week, then it went to 3620, 3630, 3630, 3655, and as you can see above, today it is the same as Monday.

The main reason for labouring this point, is that despite the general feeling, this market is not as bullish as it may seem, as it could easily have gone 30 or 40-points higher any day over the last 5 trading days.

Also, worth noting, is that although the R ratios are retreating above the zone, and increasing below it, the Y ratio bandwidth is still 400-points wide, so, to use an American football phrase, they are just moving the chains, not displaying any great bullishness.

And, exactly as we suspected last week, who knows where this zone is going to end up this week.

It is already up 100-points, and without really trying as well, it must be said.

So, perhaps the answer may be to take a peek at the Dec expiry, and how that is shaping up.

Dec is the biggest of the big, the big ones being the triple/quadruple witching ones, and don’t forget as the front month one is just ending while the other just beginning their journey.

Nevertheless, Dec is already almost three times larger, and you just can’t do anything about this, but the equity related activity generated by this always gets misinterpreted by all the forms of media.

The Y ratio bandwidth is “only” 285-points, and we say only, because normally we don’t see any Y ratio at all.

Above the zone, which let’s face it, is what everyone wants/needs to know, R1 starts at 3530, R2 at 3605 and R3 at 3705.

As yet, nothing higher, in yet another abnormal twist. Good luck.


Range:            3505  to  3655         

Activity:          Average

Type:              On balance bearish


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November 17th, 2020 by