Nb. Our comment from the 07/07/21
If the first week of this expiry was all about the SPX getting back to its zone, then the second week was all about finding out where Y2 was.
As one can see from the above table, this is now 4355, which is where the intraday highs of the last two trading days were.
Fridays came in at 4355.43, while Tuesdays was 4356.46, which was also the open.
Therefore, it was not surprising, to us at least, when the market recoiled from this encounter with Y2, although the bulls are evidentially resilient judging by the bounce.
While looking at the above table, noticing the increase in the ratios below the zone as well as the decrease above, then this suggests a bullish market.
This is true, of course, but again to us this is rather by default than design, as the bandwidths are actually exactly the same.
The Y1 ratio bandwidth remains at 235-points, while the overall Y ratio bandwidth is steadfast at 410-points.
The zone itself is also likely to move up.
The best analogy we can come up with is that the market is like an automatic car in neutral, designed to creep ahead (or at least steady on an incline).
The overall lack of ratio, also denotes a very undecided market.
There is very little else we can add, as the way the ratios are behaving is translated as bullish, and that is about the extent of it.
However, the lack of players participating is a very troublesome aspect, as is, should anything rock the boat, the corresponding Y2 (support) ratio doesn’t come into play until you get down to 4120, a full 5.41% below here.
Enjoy, but just don’t fall into the trap of believing this is a one-way street.
Range: 4255 to 4355
Nb. Our comment for 07/13/21
All we can say, is thank goodness the zone has eventually moved as we getting a tad irked having to repeat it every comment.
However, it is worth noting the level of activity, as it is not only the same as yesterday’s, which are both a marked improvement on recent levels, but more importantly it is the “type” that has eventually broken the impasse, and so much so, we are very likely to see it move up again, as 4345-4355 is now staking a claim.
Although, this is still below the current market, it is not that far away in reality.
And, if our analogy of the SPX being like an automatic car (please see above) where we mention “at least steady on an incline” we are of course referring to when it encounters Y2, or what we have called in the past, “a speed bump”.
Although, last Thursday, when the market fell 68.76-points before recovering, was a very visible example of our “one-way street trap” (again please see above).
Apart from the fact it fell down to circa 4300, which was the then zone, before recovering, it was obviously the catalyst that this market needed to gear up for the rollover and expiry this week.
With the zone moving up, naturally the ratios below have strengthened while above weakening but, this is not as bullish as it may appear at first glance.
We say this because, the Y1 ratio bandwidth has gone from 235 to 260-points overall, while the Y ratio bandwidth itself has grown from 410 to 460-points.
Out of interest, Y2 did move to 4380 yesterday, from 4355, so this market is still being sensitive to it.
And that is the entire market in a nutshell, as it may still be an automatic car encountering a retreating speed bump as it grinds forward leaving a void behind it, but we are still just talking about Y2, there to display small changes such is its sensitivity, which just highlights the utter lack of overall participation.
Range: 4305 to 4405