SPX needs a friend, no change NDX and bandwidth test today for DJX? Today’s ratios, levels and comment.

SPX , NDX & DJX Ratio Table 28th March 2018

Just as we said yesterday “so at the moment it is a bounce off high ratio levels but no mistake we are still in a bear market”, and ironically the low (2596.12) was also right on a level we were talking about, 2595.

However, we have decided to produce the ratios on two consecutive days just to highlight the issue we were mentioning, and 2595 is a perfect example.

As last Friday it was R3 and by Tuesday it had fallen to 2570, where it remains today.

However, 2595 having been R3 is still at the top end of the R2 spectrum, having just recently dipped below the R3 threshold, so is what we call a step-up.

The problem yesterday came when it fell through R1 at 2645 having bounced off it initially, and as one can see today it has slipped to 2635, and this was further compounded by little or no support from R2.

This places a lot on the shoulders of R3 if it has to go there again, as sometimes just the one test is needed, so we suspect the real clincher will be if the DJX hits ratio support at or around the same time.

Range:            2600  to  2635

Activity           Average

Type:              Neutral

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Poor old NDX and we have to give it a ten for trying as the activity is there, although obviously flattered by the benchmark being so low, but nevertheless.

However, it does just go to highlight the problem here, as despite being so one-sided it still hasn’t made any difference below the zone at all.

So, keep those ice-skates on.

Range:            6375  to  6775

Activity:          Strong

Type:              On balance bearish

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As we say above a lot may well depend on the DJX and this to us is further reinforced by the level of activity here.

As one can see it is right at the top of the scale and one-sided enough to be influential we suspect.

However, it has changed the ratio landscape significantly as one can see as yesterday, at about the same time the SPX was bouncing off 2645 here they were bouncing off R2 at 24000.

The fact it closed below and then the ratios have changed around it means that now this index finds itself in the R3 ratio bandwidth.

So how this index now reacts at either end will be absolutely crucial, and we wouldn’t put it past this market to have a bandwidth test today.

Therefore, we should also mention a significant “step-up” level at 23700, so to us this level to 24000 would also constitute a bandwidth test.

Range:            23600  to  24000

Activity:          Outstanding

Type:              On balance bearish

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