SPX , NDX and DJX today’s ratio levels and comment

Wednesday could in fact turn out to be the deciding day in this expiry for the SPX.

As so far it has been acting totally rationally after hitting Y2 at 2580 on Monday it has come back to feel for support at the other end, which in this case would be the upper boundary of its NZ at 2555.

Had this been the only index in the world we suspect this would have sufficed but with the FTSE, DAX and NDX all breaking below their respective lower boundaries it is not surprising this level here didn’t hold.

The next support level then would be the bottom boundary, and the low was 2544.04, so spot on, and the fact this index not only recovered but also finished back above its zone is very bullish.

Range:            2545  to  2555       or       2555  to  2595

Activity           Average

Type:              On balance bearish

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It sounds like we are having our cake and eating it in the NDX but despite this index finishing back within its NZ we are also happy to claim the breakout.

Basically, the NDX broke its bottom boundary first, hence the breakout (NB this was happening at the same time in real time), which then took both the FTSE and the DAX below their bottom boundaries and the SPX below their upper boundary.

If it wasn’t for the SPX getting support on their bottom boundary we don’t think any of the other 3 indices would have rallied, at least the exact timing of the moves suggests so.

It is very positive this index regained their zone but the weakness in the ratios below also suggests it is not out of the woods yet.

Range:            5975  to  6050       or       6050  to  6100

Activity:          Strong

Type:              On balance bearish

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Wow, that certainly rattled the DJX’s cage considerably.  

We suspect it has been a long time since they saw that amount of red and probably more importantly and as we said yesterday that as much as there is no ratio to stop this market going up so there is none to stop it going down, and it’s this realisation that again leads us to suspect an iota of normality is creeping back into this index.

Big changes in the ratios above the zone and so now Y2 doesn’t even start until 23400 so that now leaves a truly enormous Y1 ratio bandwidth.

The real issue here is that as it has come so far on maniacal belief if doubt now starts to creep in even the bottom boundary of the SPX’s zone won’t help.

Range:            22700  to  24000 

Activity:          Average

Type:              Bearish

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