SPX R3 the magic number, NDX it was such a long way down to Y2 and DJX warning, today’s table, levels and comment.

SPX NDX & DJX Ratio Table 3rd April 2018

A lot has changed since we last looked at the SPX (28^th March) despite it being just 2 trading days.

However, as we said, “but no mistake we are still in a bear market” and it now looks even worse.

Firstly, we must point out that in our last ratio table R3 was at 2570 and today it is 2545, so in an obviously falling ratio market, yesterday would have put it at 2555, (average over the 3 days) so again it catches the bottom 2553.80, so it’s not all gloom and doom.

The real issue for us now is the rate of decline in the ratios below the zone, the time left (18 days), the fact now the Y ratios stretch down to 2600 the zone could easily fall again and it still desperately needs a friend.

On a more positive note if this index can get back into that ocean of Y ratio then just look at what the NDX is doing, where 3% to 4% daily moves are not uncommon.

Range:            2545  to  2595        or        2595  to  2695

Activity           Moderate

Type:              On balance just fractionally bullish

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Our last comment on the NDX had Y2 below the zone at 6375, and as one can see today it is 6325, so on the same basis as the SPX that would have made it between 6325 and 6350 yesterday.

Of course, it goes in 25-point bands so with the low being 6322.60 you decide.

Although, back on the very first day of this expiry (19^th March) it was 6325 and considering the market was then 7019.95 it is churlish to focus on a meagre 25-points in truth.

Otherwise no change in our views but again another wad of strikes has been added so there is interest, it is just still way off the pace.

Range:            6325  to  6775

Activity:          Average

Type:              On balance only just bullish

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In our last comment on the DJX we said “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”.

Within the first few hours the high was 23997 and it then went down to 23728.

The rebound did take it to its high of 24092 but the fact it closed back inside its R3 ratio bandwidth meant the breakout was still on the next day, to which it duly obliged.

Monday was a difficult day as once back below 24000 the next support was DR (again) and the fact the low was 23344, way below this level, is certainly a sit-up and notice warning sign.

The redeeming factor is that it closed back above it, and that it hasn’t changed since last week, although activity is very low so no real surprise.

Range:            23600  to  23900

Activity:          Poor

Type:              Neutral

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