Ratio step-up just ahead for the SPX.

Nb. Our comment from the 06/21/21 (Not published)

Nb. Our comment for 06/29/21

It is a real shame we were not able to publish the ratios since the 8^th June, especially as so much has happened.

Firstly, the June expiry, where the zone did eventually end up at 4145-4155, meant the market finishing at 4166.45 was about as close as they were going to get under the circumstances.

However, that expiry had a direct influence on the July one, and as one can see from the ratio table above, the July zone was even then at 4220-4230.

In an ideal world (like the FTSE testing R1 at 6948.63) we would have seen Y2 tested here, but evidently the bulls were far more convinced/knowledgeable about the expiry effect, so were very quick to resume control.

So, as the market was racing back up towards its zone, it has moved, albeit by just 25 points, but nevertheless this is still a bullish sign.

But, just as before, it is hardly earth-shattering, as it is a small move, actually the smallest you can get really, and it was just within the Y1 ratio bandwidth, so also not exactly difficult to achieve.

Therefore, the big question still remains, which is how committed are the bulls? As not having been tested yet, we have nothing on which to gauge their willingness.

So, it is worth pointing out, and please bear in mind we are still only talking the minimal Y1 ratio, that there is a step-up at 4305, which, should the market encounter it, give us a very good clue towards this measure.

At the end of the day, it is very similar to the last few expires, as in still a ridiculously wide Y ratio bandwidth, and a market making new highs by default, as there is scant evidence of that many bulls around at all.

So, again we stress, this is really not a risk-free market.

Range:            4255  to  (4305) 4330           

Activity:          Poor

Type:              On balance only just bullish