It appears activity is the key to the SPX as yesterday it was rather disappointing after the big move on Tuesday, and today its worse.
So it reverts back to a 10 point trading range within the Y1 ratio bandwidth, which can only be described as boring, but to us is more reflective of the confusion.
The move down in the NZ was a surprise, especially as the market had only reached the old level, but it nevertheless reacted only to be faced with the zone switching back, so no wonder it is confused.
The answer to us is one should probably treat 2445 all the way up to 2480 as the NZ, which if the market does as well then hang on very tightly.
Range: 2455 to 2485
Activity Did not register
It was one of those decision days for the NDX yesterday and throughout the day we thought it could have gone either way.
The open was decently firmer, pretty much around where it closed however it was the high and low that were key.
Firstly the high didn’t challenge Y2, then at 5975, only getting as high as 5964.38, but the market certainly knew it was there from previous encounters so this was telling.
The low was 5909.92, which was back inside its NZ so it could have easily chosen to stay inside in “neutral” territory, but no it crossed back over its upper boundary, which is also telling.
Today the ratios are even more firmer below the zone and weaker above it, bullish, and more importantly Y2 has today slipped to 6025, but please remember 5975 still represents a considerable “step-up”.
Range: 5925 to (5975) / 6025
Activity: Very good
It is unusual for the DJX to take the back seat but again yesterday that is what it did.
In fact if its daily move, as a percent, has not been less than the SPX’s it has been the same and very rarely has it been above which is a total reversal from what we are used to seeing.
In comparison to the NDX it is no contest as that is where all the action and activity have been focused so far this expiry.
However just a day to go before the rollover so even if they don’t want to wake up that alarm clock is going to ring very soon and very loudly so they won’t have a choice.
Range: 21600 to 22100
Activity: Very poor
Type: Not bullish