SPX upwardly mobile zone now in a race against the expiry.

Nb. Our comment from 01/07/19


We probably should have said in our last comment that the zone was looking likely to move to where it has, so, to avoid the same mistake, it is also very likely to move to 3195-3205 before the end of this expiry.

This is bullish, as is the fact the ratios have built below the zone and weakened above it.

However, this has to be the case for the zone to move.

What is more important is the manner, in that if the ratio declines from say R1 to allow the zone to move in to that vacated space, then that is far more impressive than it just triumphing over the minimal Y1.

In fact, moving up into Y1 is almost more like osmosis rather than an aggressive takeover.

But credit where it is due, as at least its upwards.

And it is all well and good as things stand, but don’t ignore the fact that this index is extremely vulnerable to a shock, as there is still an absolutely massive Y Ratio bandwidth of 185-points.

Even more if you go from R2, which it has been challenging, down to the corresponding R2, which is 260-points.

As ever, it may not happen, and it could turn out to be one of those that continue to just knock on the retreating ratio door, but that doesn’t mean the risk is not there.

The question perhaps should be, is why there is no ratio building up to support this market?


Range:            3230  to  3255         

Activity:          Moderate     

Type:              On balance only jut bearish




Nb. Our comment on 01/14/20


The zone has indeed moved up again, and to exactly where we expected it to.

Likewise, the market has just “continued to knock on the retreating ratio door”.

However, now there are different factors added to the mix, being the rollover and expiry.

Therefore, we must point out that the upward move in the zone may not be over, as there is a distinct possibility of it moving to 3220-3230.

There is also an outside chance of seeing 3245-3255.

Either way, for us to see a conventional expiry, we need to see a pullback of at least 30-points, and quite possibly 50-points by the end of this week.

But, apart from the fact it’s the end game for this expiry, it’s all rather bullish, what with the rising zone and the ratios rising and falling either side of it.

Nevertheless, it has hardly been emphatic, and the risks remain, as that Y ratio bandwidth is still a staggering 180-points wide, so still very susceptible to a scare in our view.

It has done exceptionally well to avoid, or nullify, any bears out there, but it is never good when any market has blinkers on, and therefore only sees and hears what it wants to.

Needless to say, 3280 is now the critical level.


Range:            3280  to  3305          

Activity:          Average      

Type:              On balance bearish

January 14th, 2020 by