SPX zone move and boundary test.

The SPX zone does move just as expected, and already a boundary test.


Nb. Our comment from the 01/22/21


Well, we couldn’t have guessed what might happen more closely, as we got our “huge moves” and Y2 did indeed “play quite a role”.

Interestingly on the same day as well, although the first day of this expiry, Tuesday 19th was a very decent 36-point move in itself.

But we are of course referring to the Wednesday, where it exploded out of the gate and managed a 60-point move, before it hit the roadblock of Y2 at 3855.

For those that knew where Y2 was, then they wouldn’t, or shouldn’t, have been surprised when it hit this level around their midday, and basically flatlined along it for the rest of the day.

The intraday high of 3859.75, was literally a 5-minute spike towards the very end of the day, so slightly misleading.

Yesterday was also interesting, as it gapped up at the open, and therefore started at 3857.46, so above Y2, but the fact it hardly made any further northerly progression is significant as well.

As is where it closed.

However, and as you can see in the above table, Y2 has today slipped to 3895, so the market has clear skies above it now, so the bulls have actually won, but, we fear, the damage may have already been done.

For the record, in the above table it appears as if R1 above the zone has come in (strengthened), but actually it was 3960 on Wednesday, so it had strengthened, but has now weakened today, just not quite back to where it started.

The fact that the ratios have strengthened below the zone is also bullish, but at the end of the day, the risk we identified at the outset still remains.

Which is, the Y1 ratio bandwidth is now even wider, at 300-points, and the overall Y ratio bandwidth is slightly narrower, but still a very scary 535-points.

Finally, quite how the zone hasn’t moved to 3795-3805 we don’t know, but it does look a shoo-in, so do please make a note of this level just in case.


Range:            3705  to  3895           

Activity:          Average

Type:              On balance just fractionally bearish



Nb. Our comment for 01/26/21


If it’s any consolation we are feeling a bit guilty for not mentioning the fact that the zone did indeed move yesterday.

However, in our defence, we did say to take note of the new “shoo-in” level, 3795-3805.

Those that did were hopefully well prepared when the market fell yesterday to its intraday low of 3797.16, as this was definitely a test of the new zones’ bottom boundary.

And for those more familiar with our analysis, then they would also appreciate that this is also the demarcation line between bullish and bearish territory.

As such it can prove to be a hotly contested area, as was the case yesterday.

Although, this index being in Y1 ratio yesterday, this was exactly what we would expect, being a 60-point move, 120-points if you count there and back.

So, lots of big moves, whipsaw and volatility.

This index is still in a gargantuan Y1 ratio bandwidth, 310-points, and, if possible, an even bigger overall Y ratio bandwidth, 485-points.

Furthermore, we still have virtually a full four more weeks to go.

And so far, although activity is there, it is not really making that big an inroad, so we don’t envisage these bandwidths decreasing significantly any time soon.

Therefore, we would not expect things quietening down soon, in fact probably the reverse.

All in all, this expiry is building up to be tremendously exciting, and if Y2 fails to influence proceedings, then it could even become a classic.



Range:            3805  to  3905           

Activity:          Average

Type:              On balance decently bearish


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January 26th, 2021 by