Surprise zone move in the SPX.

The SPX's zone actually moves down...


Nb. Our comment from the 05/12/21


For those of you that follow us on Twitter then they knew that the zone changed to 4170-4180 the day it moved, on the 6th May the very next day after our previous note.

This was a significant, and although flagged, even we were a bit surprised at how quickly it came about.

Not because of the depth of the ratios, but because it had taken the previous move so long in a similar situation.

However, that made two moves in two days, a good sign that interest and involvement were picking up.

Also, before this expiry is out, we would fully expect one more move, very probably to 4195-4205, but we still have a week and a half to go, so no rush.

But this is not the real reason why we are leading with the zone, but rather because the market now finds itself below it, and therefore in bearish territory.

This is only day 1 that it has been below its zone, so today is really very critical, as it generally tends to decide whether the bulls or bears are now in charge.

So, 4170-4180 is now a very significant level.

We are not great believers in coincidence, so it is also worth pointing out that the FTSE is also in a similar situation with regard to its zone.

Obviously, our ratio table above gives you the levels, so it really is a case now of who is, or wants to be in charge, as the overall bandwidths have shrunk a bit, with Y1 now standing at 260-points, and the overall Y ratio bandwidth “only” 435-points.

Therefore, if the bulls remain absent, then there is still a huge potential move.

Either way, it looks like this market is gearing up for a volatile end to this expiry, which just hasn’t got off the ground, and still remains one of the biggest Y ratio bandwidths we have ever seen.

And next week is the rollover and expiry, and that is into the second “biggie” of the year, the triple witching June expiry, so we could be in for a hot summer after all.


Range:            3995  to  4170           

Activity:          Poor

Type:              On balance bearish


Nb. Our comment for 05/19/21


Actually, we could start this note off exactly as we did the previous one, apart from the fact we didn’t actually mention the zone move on Twitter yesterday, sorry.

To be honest, it caught us somewhat by surprise, admittedly the potential was always there, simply because of the lack of ratio about.

And again, because of this lack, it didn’t take much activity and it was a done deal, but it was rather significant.

More significant however, was that the market rallied back up to it, but couldn’t hold it.

But it is still below it, so despite being in bear territory, the next day or so should benefit from an upwardly gravitational pull from it, which is somewhat of a novelty these days, such a rarity is this situation.

Although, with the mighty June looming large in the headlights, and if this hasn’t caught up with the market, then it may prove the larger celestial body.

At the end of the day, or more precisely this expiry on Friday, the one aspect we will take from this is that this index has truly dodged a bullet.

As with so little ratio about, it really could have gone anywhere, and if it had followed a conventional path, it should have gone down (or up) to a support (resistance) level, reversed to the opposite one, before finishing in or about is zone.

The point being, is that as the Y ratio bandwidth was literally 10%, the round-trip described above could have resulted in a total move of 20%, in just 5-weeks, and for those who prefer numbers, that would have been over 800-points.

Shame really, as we are not altogether convinced that these conditions won’t persist, and just like Tuesday’s sudden zone change, is it won’t take much to get things started and there is hardly ever any warning, and with the “biggie” June next, if anything is going to kick it off, then this would be the prime candidate we suspect.


Range:            4020  to  4145           

Activity:          Poor

Type:              On balance bearish


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May 19th, 2021 by