In the end chasing records was more important for the SPX than the expiry, which is unusual for them being the preserve of the DJX really, but we can appreciate the heightened activity because of the rollover being misconstrued for bullishness.
Of course there is no problem in October as this index is in the Y ratios but it is an intermediary so everything quietens down considerably and becomes more sensitive, the degree of which is the first question.
Therefore a lot will probably be learned from how it reacts to Y2 at 2505 otherwise there is acres of room between the R ratios and bit of a mirror image from the start of Sept with the market opening at 2425.50 with Y2 at 2420 and the low on the 21st August being 2417.35, which was also the expiry low.
Range: 2480 to 2530
Type: On balance bearish
It is difficult to remember that the NDX at the start of September was below its NZ with over 100 points to go before it even reached Y2.
So it was rather grateful to the other two we suspect as it went as low as 5750.50 which was also its expiry low but in the end it made for a fantastic rally of 237.49 points, 4.13%.
October is very similar with regard to the amount of Y ratio present however this time it is just above its zone.
However we should perhaps mention the step-up levels, being 5775 and 6025, as we as yet do not know how sensitive this index might be this trip.
Range: 5950 to (6025) / 6125
Type: On balance only just bullish
The DJX is normally the one to go chasing new highs and especially this year when it hasn’t hardly even glanced back.
Obviously not quite as manic as the first quarter but even now we are under no illusion that the “Trump trade” still rules this index and derivatives come second.
Having said that the bulls are back in force for this expiry and activity is reflective of this so it is hard for us to see any change in these circumstances.
In September at the start of the expiry it went down to the top boundary of its NZ at 21600 and the low was also 21600 then and for the expiry and this combined with the SPX hitting Y2 was enough to set them off again.
Range: 21900 to 22500
Activity: Off the scale
Type: On balance definitely bullish