SPX , NDX & DJX Ratio Table 1st October 2018
We did get sort of a decision in the SPX, but perhaps one that was not as definitive as we would have liked.
Basically, the intraday low last Wednesday 26th Sept was 2903.28 so a good and solid test of their zone upper boundary, and as we said the first line of support.
The fact it held is bullish, however the next two days were all about Y2 at 2920 with the intraday highs failing to break back through even this meagre amount of dynamic delta hedging, or futures selling, which is not so good.
Activity also suggests there is a lot of fence-sitting going on, and the only ratios to move today are both Y2 levels.
Considering this is week 2 of 4 to still have so much Y ratio about is the main factor, not so much where Y2 starts, and as this bandwidth is 125-points wide it wouldn’t take very much to get this market jumping or whipsawing around by 1%+ daily.
Range: 2905 to 2945
Hardly any change in the NDX ratios, below the zone they have come in a bit which is all.
The story here is the very impressive Y ratio bandwidth still in existence, and basically the market is acting just like we would expect under these conditions.
After the extended zone bandwidth test last Monday the close did give the clue to its direction, but this doesn’t tell the full story.
As almost every day where there has been little change the trading range has been very decent, as epitomised by Wednesday 26th September close of -0.11-points masking a daily range of 84.36-points.
Unless, or until, the ratios change we can’t see this change either.
Range: 7525 to 7700
Activity: Very good
In our last comment on the DJX we did say its zone “the zone may trap it for a while, but just the slightest of nudges would see it escape”, so we were half right.
It did take only the slightest of nudges but that very day, the 25th September saw it close at 26492, or 8-points below the bottom boundary.
Very close call, but 8-points is perhaps all it needs sometimes, despite it being such a large index as this is only 0.03%.
The following day it did get back to the middle of its zone intraday, but for Thursday and Friday the intraday high was the bottom boundary, which is never good.
However, this does put it on strike 3, so if it goes there again it should break back up into its zone, but at the end of the day it is in bear territory and so the next line of support is at Y2 down at 25900.
Range: 25900 to 26500