SPX , NDX & DJX Ratio Table 9th August 2018
Judging by the activity the bulls are back in town in the SPX, as for once this expiry the type is tipped in their favour, albeit only just.
The ratios are a mixed bag as well, to explain, we have decent strength below the zone but at the extremity DR actually slips.
Above the zone it is the reverse, as they all slip apart from R3, which gains 30-points.
So, rising below and falling above is bullish, but the real problem here is that they keep banging their heads on R1, and don’t seem to have enough will or firepower to break above it.
On Tuesday R1 was at 2855, today 2865, so presumably yesterday was 2860, and the high of 2862.44 bears this out.
Points to consider are that there is still over 100-points of Y ratio bandwidth below this market and the rollover starts next week, which also leads into the third big expiry of the year.
On a more positive note, and in the absence of any great motivation, there is now plenty of Y1 above the zone that could easily see the zone compromise for the expiry by moving itself.
Range: 2805 to 2865 or 2865 to 2880
Activity Average
Type: On balance just fractionally bullish
The NDX is a very difficult read, although that is now not last Tuesday when we said “here it doesn’t have to decide until 7475”.
Needless to say, the high on that day was 7478.96, and the rebound took the market down a rather impressive 35-points.
Wednesday was pretty much a repeat with the high being 7486.21, which was a double peak, so not only did it make a slightly deeper penetration it came back for seconds.
The pullback was an even more impressive 50-points, but the most important aspect was the close, significantly poised just below Y2.
This, of course, brings around the distinct possibility of them employing the opening gap gambit, to effectively leapfrog this level.
However, this would be strike 3 so we actually have no axe to grind anyway.
The issue to us, and what makes it a difficult read, is the activity, which is all mainly put related.
The problem is it is not enough to qualify as a big player, so it is difficult to tell whether it is actually bullish or bearish, sorry, but the market movement suggests bullish.
Range: 7375 to 7475 or 7475 to 7625
Activity: Strong
Type: On balance definitely bearish
To be fair breaking through its zones upper boundary is not as hard as taking on R1 like the SPX, and anyway it had been trying for over two weeks so it wasn’t before time.
The big difference here is that there is no more Y2 above the zone, just a stupidly huge Y1 ratio bandwidth.
Also, below it there is still that 1000-point zone of no ratio at all.
At the moment it is all calm and peaceful, but with the rollover, expiry and the mighty Sept trip on the horizon, then just like the arid landscape, all it would take is one little spark and 300-point moves in either direction, or even both on the same day, are more than likely.
Range: 24500 to 25500 or 25500 to 26500
Activity: Moderate
Type: Bearish
