The SPX on Friday actually spent most of the day inside its NZ only breaking back above 2580 in the final hour or so.
This is remarkably reminiscent of the last expiry where it toyed with its zone but spent most of the rollover week just above it.
Although this in itself was quite a victory as don’t forget the DJX had its own agenda as it added about 450-points in this week alone, which makes it all the more important to see if it is once again being rational.
Back here in the SPX being just above its zone with Wednesday looming is as near the perfect set-up that one can hope for, but the explosion in activity suggests it’s not cut and dried yet.
Range: 2570 to 2580 or 2580 to 2605
Activity: Very strong
Type: On balance bearish
In December the NZ hasn’t changed so it is still down there at 2545-2555 which may be problematic.
However, Y1 is at 2575 which suggests it may move up here to dovetail with Nov’s but with so much activity here it might be wise not to take anything for granted.
There is still a surprising amount of Y ratio present and where the market is it is plain to see how important 2580 and 2605 are in both expiries.
Range: 2555 to 2580 or 2580 to 2605
Activity: Moderate
Type: On balance only just bearish
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The NDX has actually had a very good expiry so far therefore on Friday getting as low as 6284.22, or less than 10-points from its upper boundary was tremendous.
A combination of a rising zone and a falling market have left this index sitting nicely just north of their NZ at the start of the rollover.
As we said in the SPX this is sometimes as good as you can get at this stage, and so now just the next two days are crucial.
However, just like the SPX activity here suggests it is not cut and dried here either, but the big difference here is that one they are no stranger to this level of activity and secondly it is not all one-way.
Range: 6275 to 6375
Activity: Very strong
Type: On balance bearish
Sadly, NDX December is looking very similar to the November expiry, basically pretty bald on top.
Of course, there is still a very long way to go and it will change but the NZ being 300-points due south is a serious concern.
However, at least this is in keeping with the other two.
Range: 6250 to 6475
Activity: Poor
Type: Bearish
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This is an impossible call as it has been in its own bubble for so long who can know for sure when rationality will return here.
We saw a few hints last expiry that gave us the first head’s-up, but then normal service was restored in the rollover week.
And again, this expiry a few more hints, perhaps stronger ones as this is the first time this index has seen the inside of its zone for a very long time.
In fact, the DJX has closed inside its zone for the last 4 days, astonishingly.
How it may react when or if it gets into bearish territory is going to be a revelation for sure.
Range: 21700 to 23400 or 23400 to 23600
Activity: Moderate
Type: Bearish
The first look at December DJX is quite perplexing as it appears to have been left behind for quite some time.
The NZ being 22900-23100 is the most obvious difference, but here it does not give any indication at all that it might change.
Also, the number of strike where the market is currently being very few, this again looks like it has been neglected.
With the R ratios so close above and so far away beneath this looks very bearish, but again it will be a question of whether or not this index resumes rational behaviour.
Range: 23100 to 23500
Activity: Did not register
Type: N/A
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