June 22nd, 2022 by Richard

Thank goodness for the dynamic delta, otherwise the SPX would really be in a mess.

 

Nb. Our comment from the 06/14/22 (Not published)

 

Nb. Our comment for 06/22/22

 

We can’t not start without mentioning the end of the June expiry, which most certainly proved very expensive for someone.

But despite it getting out of control from a derivative perspective, it did adhere to some ratio levels, so at least the dynamic delta was having an effect right until the end.

Our final trading range was either 3645 to 3745 or 3745 to 3895. The fact that the market failed to close above 3745 when we last published on the 14th was a warning. It still could have made the zone by the Friday, but getting back to 4000 by the next day, rollover Wednesday, was obviously not going to happen. The bottom of that trading range was 3645, and the intraday lows on the Thursday and Friday were 3639.77 and 3636.87 respectively.

Evidently, “derivatives didn’t reassert their authority”.

Anyway, and more importantly, this, the July expiry, and what is the ratio picture telling us for this trip.

And if anything, the enormous Y ratio bandwidths have actually got worse.

Now the Y1 one stands at 260-points, but the overall one is the widest ever, coming in at the humongous 815-points wide.

Perhaps a saving grace, for the bulls at least, is at least this time the market is actually at the bottom of this huge bandwidth.

As we have seen, the dynamic delta denoted by the ratio levels has continued to work, it is really now just a question of who is in charge?

The highly strung emotions of the equity mob, or the money on the table of the derivative players?

Sadly, we can’t answer this question, all we can do is say that historically, once the over-excitement of a triple is over, money normally rises to the top.

 

Range:            3745  to  3995           

Activity:          Poor

Type:              Bullish

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June 14th, 2022 by Richard

Well we certainly got our 2 to 3% moves, and right on cue as well, marvellous.

 

Nb. Our comment from the 06/07/22

 

Well, it promised so much but, after that seismic move down in the zone, the SPX has just stalled.

Although, we did suspect that it was pure and simple a reset, and so we also think that the true nature of this market is yet to emerge.

It was more to do with the sudden shock of hitting R2 on the very first day, the resultant subsequent rebound forcing the radical zone move, rather than a more deliberate market motivation that caused the reset we think.

Once the zone had moved, and the market was above it, had there been any further aspirational bulls out there, they really could have had the mother of all parties.

Still could of course, as R1 is still a massive distance away at 4505, but there just doesn’t seem to be the belief.

Oddly however, we are also not seeing the zone want to move away from where it is. Which is a bit bizarre, because this index has stalled around the low 4100’s, which is in the virtually non-existent Y1 ratio gigantic bandwidth, and yet it hasn’t forced the zone to settle around it.

There may well be technical, or even economic reasons for this torpor but, from a derivative perspective, there is no reason at all as the market should be fizzing about with 2 or 3% moves.

On a positive note, the level of activity has been ok throughout, so we feel certain this particular doldrum won’t last much longer.

At the very least, next week is the rollover and expiry, so this alone should start to agitate this market and get some volatility out there.

So, same as last week, the R ratios below the zone should provide some support, but it has been there already this trip so will be no stranger to what’s there.

On the other side of the coin, there is still an absolute vast swathe of Y ratio above it, so all it would need it a gentle shove in that direction, but what in the current climate could provide said shove we have no idea.

 

Range:            4005  to  4505           

Activity:          Moderate

Type:              Neutral

 

 

Nb. Our comment for 06/14/22

 

Well, we certainly got our 2 to 3% moves, and right on cue into the bargain.

The only question that now remains, is will derivatives reassert their authority for the rollover and expiry?

Interestingly, the zone has still not moved. Nor are we seeing any likely successor making a move.

However, in glorious hindsight, it really was a very big warning when the zone didn’t move up despite the market trading for so long in the low 4100’s.

In fact, reading what we said above, back on the 7th (before the market opened), and again in hindsight, all the signs were there and mentioned, we just didn’t state the probability, sadly.

Anyway, the rollover is this Wednesday but, in all likelihood and considering the magnitude of the move, it will more than likely be down to the actual expiry on the Friday.

It is still a tall order, as emotions are running high naturally, but at least it’s not new news that is spooking the market. Actually, one has to wonder why the same old chestnuts are being regurgitated yet again to explain this recent market move, as this is not something that the market hasn’t been aware of, and for some considerable time. Curve-fitting really, as nobody really wants to explain how it is that this is actually very predictable and yet they still don’t expect it.

On to more important issues, and the move down in R3 and DR below the zone actually happened yesterday, the 13th.

So, just like the FTSE and 7650, the deep incursion below 3745 tells its own story, as does the close, which was just back above it.

Out of interest, the level of ratio at the intraday low yesterday of 3734.30 is not now found today until 3715/3720.

Going to be another epic triple witching expiry, and we would expect no less of course.

 

Range:            3645  to  3745        or        3745  to  3895           

Activity:          Moderate

Type:              On balance just bearish

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June 7th, 2022 by Richard

The SPX has had ample opportunity to cut loose, so why hasn't it?

 

Nb. Our comment from the 06/01/22

 

Well, it certainly was dramatic and it certainly was a seismic move in the zone.

Had one realised what was going on, then last week was like reading a book.

The same day as our last note the market hit the intraday low of 3875.13, a deep incursion into R2.

This was evidently enough of a stimulus to the bulls, happy to piggyback on the futures buying dynamic delta unleashed, to force the zone into the seismic move we had mentioned, as when we crunched the numbers on Wednesday it had indeed moved to 3995-4005.

Therefore, Wednesday was all about the new zone but, the Thursday and Friday, were definitely all about the sudden freedom the market found itself courtesy of that now vast expanse of Y1 above said new zone.

Of course, we have seen the zone in the SPX make big moves before, but we can’t actually recall one of this magnitude before. Nor can we ever think of such a move being so necessary, as it really has “reset” this market for this expiry.

So, from starting off in bear territory below the zone, and testing R2 ratio, we now have the situation where it is happily back in bullish territory in acres of Y ratio.

Therefore, you would be forgiven for thinking that the hard work had now been done but, to us at least, now everything has been reset, the true nature of the market can begin to emerge.

It may well be, that the bulls have now gained sufficient superiority that, in hindsight, the hard work has indeed been done. However, now the market is above its zone the gravitational pull from it is now downwards, not upwards. Plus, there is a chance, that the zone could move back from whence it came.

So, still plenty of risks out there but, the next few days and how they evolve, should go a long way towards either cementing this sea change, or revealing it to be just what we said, a reset.

Nevertheless, playing the cards we now have in front of us, support is the zone and the R ratios immediately below that. Whereas resistance, in the form of R ratios, doesn’t appear until 4605. And, if it remains as aggressive on the upside, then R2 doesn’t appear until 4705. Which is a ridiculous amount of upside for a bull market, let alone the bear one we are meant to be in on a conventional definition, not ours (unless the zone does move back up of course), but even so, it is a lot.

 

Range:            4005  to  4605           

Activity:          Poor

Type:              Neutral

 

Nb. Our comment for 06/07/22

 

Well, it promised so much but, after that seismic move down in the zone, the SPX has just stalled.

Although, we did suspect that it was pure and simple a reset, and so we also think that the true nature of this market is yet to emerge.

It was more to do with the sudden shock of hitting R2 on the very first day, the resultant subsequent rebound forcing the radical zone move, rather than a more deliberate market motivation that caused the reset we think.

Once the zone had moved, and the market was above it, had there been any further aspirational bulls out there, they really could have had the mother of all parties.

Still could of course, as R1 is still a massive distance away at 4505, but there just doesn’t seem to be the belief.

Oddly however, we are also not seeing the zone want to move away from where it is. Which is a bit bizarre, because this index has stalled around the low 4100’s, which is in the virtually non-existent Y1 ratio gigantic bandwidth, and yet it hasn’t forced the zone to settle around it.

There may well be technical, or even economical reasons for this torpor but, from a derivative perspective, there is no reason at all as the market should be fizzing about with 2 or 3% moves.

On a positive note, the level of activity has been ok throughout, so we feel certain this particular doldrum won’t last much longer.

At the very least, next week is the rollover and expiry, so this alone should start to agitate this market and get some volatility out there.

So, same as last week, the R ratios below the zone should provide some support, but it has been there already this trip so will be no stranger to what’s there.

On the other side of the coin, there is still an absolute vast swathe of Y ratio above it, so all it would need it a gentle shove in that direction, but what in the current climate could provide said shove we have no idea.

 

Range:            4005  to  4505           

Activity:          Moderate

Type:              Neutral

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June 1st, 2022 by Richard

Can the SPX consolidate this seismic zone move, or is it just a reset?

 

Nb. Our comment from the 05/24/22

 

Well, we just have to start with how the May expiry ended, and if you remember the SPX had just bounced off R3 (3880) and had just got back into the Y ratio bandwidth. We then said 4200 looks like a “shoo-in” to be the next zone, but 4100 was also highly probable. So, to see this index close at 4088.85 on the Tuesday we thought it had done it.

Of course, it then went all wrong, and the peril of having so much Y ratio became apparent yet again.

In the end the zone didn’t move, but the R ratios continued to collapse, so much so, by Friday R1 was at 3870. Therefore, in the end, this index did expire in its Y ratios but, there is no denying it, that this was an expensive trip for derivatives.

Looking at June, on Monday, R1 was at 3995, so the fact that the SPX closed on the preceding Friday at 3901.36 meant this expiry opened in the R1 bandwidth.

And, with R2 at 3895 (down from 3945) meant this index was already knocking on this door from the very start.

Not a good baptism really, but one which meant we were not that unduly surprised by the market reaction yesterday.

The question is really what happens next?

The short answer is that this will depend on how, or if, the zone sorts itself out, as being at 4300 is too far above the horizon to have any purposeful influence.

It may sound bizarre, especially as Y2 is at 4095 and R1 3995, but we can see a seismic zone move to 4000, almost as if it is resetting itself.

A lot will depend on today, what and how much business is generated in particular, but this index needs something dramatic to happen. As, once done, then the ratios can start creating a more conventional distribution. Something desperately needed, as currently the overall Y ratio is a gargantuan 635-points (16%) so skittish doesn’t even begin to describe it.

 

Range:            3895  to  3995           

Activity:          Moderate

Type:              On balance only just bullish

 

 

Nb. Our comment for 06/01/22

 

Well, it certainly was dramatic and it certainly was a seismic move in the zone.

Had one realised what was going on, then last week was like reading a book.

The same day as our last note the market hit the intraday low of 3875.13, a deep incursion into R2.

This was evidently enough of a stimulus to the bulls, happy to piggyback on the futures buying dynamic delta unleashed, to force the zone into the seismic move we had mentioned, as when we crunched the numbers on Wednesday it had indeed moved to 3995-4005.

Therefore, Wednesday was all about the new zone but, the Thursday and Friday, were definitely all about the sudden freedom the market found itself courtesy of that now vast expanse of Y1 above said new zone.

Of course, we have seen the zone in the SPX make big moves before, but we can’t actually recall one of this magnitude before. Nor can we ever think of such a move being so necessary, as it really has “reset” this market for this expiry.

So, from starting off in bear territory below the zone, and testing R2 ratio, we now have the situation where it is happily back in bullish territory in acres of Y ratio.

Therefore, you would be forgiven for thinking that the hard work had now been done but, to us at least, now everything has been reset, the true nature of the market can begin to emerge.

It may well be, that the bulls have now gained sufficient superiority that, in hindsight, the hard work has indeed been done. However, now the market is above its zone the gravitational pull from it is now downwards, not upwards. Plus, there is a chance, that the zone could move back from whence it came.

So, still plenty of risks out there but, the next few days and how they evolve, should go a long way towards either cementing this sea change, or revealing it to be just what we said, a reset.

Nevertheless, playing the cards we now have in front of us, support is the zone and the R ratios immediately below that. Whereas resistance, in the form of R ratios, doesn’t appear until 4605. And, if it remains as aggressive on the upside, then R2 doesn’t appear until 4705. Which is a ridiculous amount of upside for a bull market, let alone the bear one we are meant to be in on a conventional definition, not ours (unless the zone does move back up of course), but even so, it is a lot.

 

Range:            4005  to  4605           

Activity:          Poor

Type:              Neutral

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May 24th, 2022 by Richard

Thanks to May the SPX June expiry was born knocking on R2 Ratios door.

 

Nb. Our comment from the 05/18/22 (Not published)

 

Nb. Our comment for 05/24/22

 

Well, we just have to start with how the May expiry ended, and if you remember the SPX had just bounced off R3 (3880) and had just got back into the Y ratio bandwidth. We then said 4200 looks like a “shoo-in” to be the next zone, but 4100 was also highly probable. So, to see this index close at 4088.85 on the Tuesday we thought it had done it.

Of course, it then went all wrong, and the peril of having so much Y ratio became apparent yet again.

In the end the zone didn’t move, but the R ratios continued to collapse, so much so, by Friday R1 was at 3870. Therefore, in the end, this index did expire in its Y ratios but, there is no denying it, that this was an expensive trip for derivatives.

Looking at June, on Monday, R1 was at 3995, so the fact that the SPX closed on the preceding Friday at 3901.36 meant this expiry opened in the R1 bandwidth.

And, with R2 at 3895 (down from 3945) meant this index was already knocking on this door from the very start.

Not a good baptism really, but one which meant we were not that unduly surprised by the market reaction yesterday.

The question is really what happens next?

The short answer is that this will depend on how, or if, the zone sorts itself out, as being at 4300 is too far above the horizon to have any purposeful influence.

It may sound bizarre, especially as Y2 is at 4095 and R1 3995, but we can see a seismic zone move to 4000, almost as if it is resetting itself.

A lot will depend on today, what and how much business is generated in particular, but this index needs something dramatic to happen. As, once done, then the ratios can start creating a more conventional distribution. Something desperately needed, as currently the overall Y ratio is a gargantuan 635-points (16%) so skittish doesn’t even begin to describe it.

 

Range:            3895  to  3995           

Activity:          Moderate

Type:              On balance only just bullish

 

Available to buy now

The faction account of the Big Bang, The Great Storm and the market crash of 1987, available in eBook and paperback here, a must read if you don’t believe in history repeating itself.

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May 17th, 2022 by Richard

After a huge test of R3 Ratio the SPX finds itself back in the Y Ratios just in time for the rollover and expiry.

 

Nb. Our comment from the 05/11/22

 

It is certainly going to be a grandstand finish to this expiry, and derivatives have evidently got their work cut out for them.

A lot has gone on from our last comment but, since then, it has been all about the R ratios.

On Thursday 5th when R1 was at 4145, the market went as low as 4106.01 before finishing at 4146.87. This could have been a good sign, and on another day, it could well have been so, the bulls having fought back so hard to get the market back into the Y ratios.

The Friday saw a bad start but, again, the bulls fought back, getting the market as high as 4157.69 (nb. R1 still at 4145). Then it all went sour, with the market plummeting to R2 at 4070, with the intraday low of 4067.91.

The fact that it bounced off this level, but still closed south of R1 was a warning.

Therefore, the first two days of this week have all been about R2, which had now slipped to 3995. Monday’s intraday low was 3975.48 and the close was 3991.24. Very worrying for Tuesday. Which actually started well, but then went down to 3958.17, before rallying back above R2 for the close.

Classic bull vs bear stuff, each using the dynamic delta to advance their respective causes.

This now makes today rather critical, or should we say, holding above R2 rather critical for the bulls.

We do think there is at least one more day of R2 staying at 3995, but no denying the ratios are slipping below the zone.

Of course, we expect the zone to move down, and don’t lose sight of the fact it is the rollover and expiry next week. However, there is no front-runner at present.

We suspect, the outcome of today, and possibly tomorrow, will go a long way to defining where any likely expiry of this month will be.

We have to side with the bulls, simply because they are backed up by the R2 amount of dynamic delta futures buying but, we haven’t seen this index being so aggressive (either way) for a very long time, so our conviction level is not 100% even if the levels remain unchanged.

 

Range:            3995  to  4095           

Activity:          Poor

Type:              Bullish

 

 

Nb. Our comment for 05/17/22

 

Please see above for what we wrote on the 11TH, bearing in mind it was before the market opened that day.

So, to carry straight on from above, on Wednesday 11th the market did try to rally, getting as high as 4049.05, before capitulating and finishing at 3935.18.

This was a very important close, and one we had guessed the significance of above, as this left the market below R2 at 3995.

Therefore, the next line of support was R3 at 3880.

The intraday low (and so far, expiry low as well) on Thursday was 3858.87. Quite an overshoot, but under the circumstances understandable.

The main circumstance being the weakness in the ratios below the zone, itself in imminent threat of moving lower.

And, as one can see in the table above, the zone has indeed moved lower, as has R3, and considerably so.

In fact, all the ratios below the zone are considerably weaker. And, this has been a daily collapse, please remember you are just seeing a weekly snapshot.

So, in reality, it was by the skin of its teeth that R3 held out. This is good news if you are a bull, or own shares, not so much if you are a bear of course.

Is it a coincidence that Monday’s intraday low was 3983.99, which is where R1 is today, who knows? But what it does mean is that now this market is back into the Y ratio bandwidth.

And as we are now into the rollover and expiry on Friday this could not be timed better.

Therefore, the really big question is where will the zone end up? The current “shoo-in” is 4195-4205 but, in our experience, when you get into the final few days and among the minimal Y ratio, nothing is impossible.

However, anywhere in Y1 would be our first hope. After that, practically speaking, 4095-4105 looks as good a bet as any. Although, had one asked this question last week, anywhere in the Y ratios would have been our answer whilst revealing our crossed fingers.

  

Range:            3985  to  4295           

Activity:          Moderate

Type:              On balance only just bearish

 

Available to buy now

The faction account of the Big Bang, The Great Storm and the market crash of 1987, available in eBook and paperback here, a must read if you don’t believe in history repeating itself.

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May 11th, 2022 by Richard

Can R2 stem the SPX bears?

 

Nb. Our comment from the 05/04/22

 

Apologies for the late update, probably made all the worse as the markets have been so expectedly volatile.

When we last published (26/05/22 and please see above) it was all about R1 at 4195, and as the market closed that day at 4175.20, it was definitely the bears in control.

However, the next day, Wednesday, saw the bulls try to wrest back control with a very decent rally. But, R1 was unchanged, despite the zone falling to where it is today, so the close at 4183.96 did look slightly ominous, despite it being so close.

A very decent gap up at the open gave the market a good start, and with the intraday low of 4183.96 coupled with an unchanged R1 showed it was still being a nuisance.

Friday saw the bears really take it to the ratios, although as we said above, it seems our strike three was rather pertinent.

On Monday and Tuesday this week R1 slipped to 4170 and 4145 respectively.

For those purists the intraday high on Monday was 4169.81, whereas the intraday low on Tuesday was 4147.08.

So, it was still being very much involved, it is just a shame we don’t publish daily anymore, as then you could see the dynamic delta in real time.

Looking forward, and a lot depends now on how the ratios evolve daily of course, but there are still some guidelines we can possibly help you with.

Firstly, the zone is likely to move to 4295-4305.

Depending on sensitivity, the rollover and expiry is next week.

The overall respective Y ratio bandwidths remain unchanged at 310 and 510-points, so really don’t expect any reduction in volatility.

Otherwise, unless you are a bear that is, fingers crossed that the dynamic delta created by R1 continues to do its job.

 

Range:            4145  to  4395           

Activity:          Poor

Type:              Neutral

 

 

 

Nb. Our comment for 05/11/22

 

It is certainly going to be a grandstand finish to this expiry, and derivatives have evidently got their work cut out for them.

A lot has gone on from our last comment but, since then, it has been all about the R ratios.

On Thursday 5th when R1 was at 4145, the market went as low as 4106.01 before finishing at 4146.87. This could have been a good sign, and on another day, it could well have been so, the bulls having fought back so hard to get the market back into the Y ratios.

The Friday saw a bad start but, again, the bulls fought back, getting the market as high as 4157.69 (nb. R1 still at 4145). Then it all went sour, with the market plummeting to R2 at 4070, with the intraday low of 4067.91.

The fact that it bounced off this level, but still closed south of R1 was a warning.

Therefore, the first two days of this week have all been about R2, which had now slipped to 3995. Monday’s intraday low was 3975.48 and the close was 3991.24. Very worrying for Tuesday. Which actually started well, but then went down to 3958.17, before rallying back above R2 for the close.

Classic bull vs bear stuff, each using the dynamic delta to advance their respective causes.

This now makes today rather critical, or should we say, holding above R2 rather critical for the bulls.

We do think there is at least one more day of R2 staying at 3995, but no denying the ratios are slipping below the zone.

Of course, we expect the zone to move down, and don’t lose sight of the fact it is the rollover and expiry next week. However, there is no front-runner at present.

We suspect, the outcome of today, and possibly tomorrow, will go a long way to defining where any likely expiry of this month will be.

We have to side with the bulls, simply because they are backed up by the R2 amount of dynamic delta futures buying but, we haven’t seen this index being so aggressive (either way) for a very long time, so our conviction level is not 100% even if the levels remain unchanged.

 

Range:            3995  to  4095           

Activity:          Poor

Type:              Bullish

 

Available to buy now

The faction account of the Big Bang, The Great Storm and the market crash of 1987, available in eBook and paperback here, a must read if you don’t believe in history repeating itself.

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May 4th, 2022 by Richard

R1 Ratio still being a nuisance to the SPX bears.

 

Nb. Our comment from the 04/26/22

 

Well, it is not very old this expiry, but boy, has there been a lot going on already.

We have been warning about the extremely wide Y ratio bandwidths, and now you have just experienced why.

But, firstly, obviously the zone hasn’t moved. And we think the reason for this has been because 4395-4405 has taken over as the new potential home for the zone, rather than our suspected 4445-4455.

Nevertheless, we think a move is still imminent. However, a lot may well depend on what happens now after yesterday’s extraordinary moves.

Now, R1 hasn’t moved throughout this expiry, and even before it became the front month, so we have had it at 4195 since the 13th April. So, no excuses for not knowing it was there.

However, we may give you a bit of licence as the intraday low was 4200.82, but not much, as after plunging all the way down from its zone on Friday (intraday high 4512.94), which is a drop of over 300-points in two days making the vega spike, so we are hardly surprised the market reacted a bit early.

And, the astute, would have also noted that the close on Monday was 4296.12, just a fingertip north of Y2.

Which brings us back round to the “what happens now” bit. Was yesterday’s 100-point rally just a knee-jerk reaction to encountering the dynamic delta inspired futures buying? Or have the bulls wrested back control?

Always difficult to tell we have found. The best scenario is that the market goes back down to R1. If the bears are in charge, it will test it again, and it’s still formidable, then its either put up or shut up. If the bears are lacklustre, or wavering, and the bulls are circling, then it shouldn’t need a second test.

Finally, don’t forget our strike three rule, as this may yet be pertinent.

 

Range:            4195  to  4495           

Activity:          Moderate

Type:              On balance bearish

 

 

 

Nb. Our comment for 05/04/22

 

Apologies for the late update, probably made all the worse as the markets have been so expectedly volatile.

When we last published (26/05/22 and please see above) it was all about R1 at 4195, and as the market closed that day at 4175.20, it was definitely the bears in control.

However, the next day, Wednesday, saw the bulls try to wrest back control with a very decent rally. But, R1 was unchanged, despite the zone falling to where it is today, so the close at 4183.96 did look slightly ominous, despite it being so close.

A very decent gap up at the open gave the market a good start, and with the intraday low of 4183.96 coupled with an unchanged R1 showed it was still being a nuisance.

Friday saw the bears really take it to the ratios, although as we said above, it seems our strike three was rather pertinent.

On Monday and Tuesday this week R1 slipped to 4170 and 4145 respectively.

For those purists the intraday high on Monday was 4169.81, whereas the intraday low on Tuesday was 4147.08.

So, it was still being very much involved, it is just a shame we don’t publish daily anymore, as then you could see the dynamic delta in real time.

Looking forward, and a lot depends now on how the ratios evolve daily of course, but there are still some guidelines we can possibly help you with.

Firstly, the zone is likely to move to 4295-4305.

Depending on sensitivity, the rollover and expiry is next week.

The overall respective Y ratio bandwidths remain unchanged at 310 and 510-points, so really don’t expect any reduction in volatility.

Otherwise, unless you are a bear that is, fingers crossed that the dynamic delta created by R1 continues to do its job.

 

Range:            4145  to  4395           

Activity:          Poor

Type:              Neutral

Available to buy now

The faction account of the Big Bang, The Great Storm and the market crash of 1987, available in eBook and paperback here, a must read if you don’t believe in history repeating itself.

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April 26th, 2022 by Richard

And now you know why we warn about such huge Y ratio bandwidths.

 

Nb. Our comment from the 04/20/22

 

Firstly, we have to say what a tremendous and fascinating expiry the April one was.

Basically, if you can cast your minds back to last week, on Thursday 13th it jumped 49.14-points to close at 4446.59, which essentially enabled the settlement price to come in on that Friday at 4452.07, right in our zone. So, you can probably add remarkable to that superlative list as well, as with so little ratio around at all, you are talking fine-tuning to the “n’th” degree.

Anyway, looking at the ratio alignment in the new May expiry, which is in fact two trading days old now, and it’s basically more of the same.

Albeit, with a couple of noticeable differences. The first being, that immediately after the expiry, the SPX gave up everything it gained on the Thursday.

This just cemented the fact it was going to start May below its zone, which has remained unchanged whereas April’s zone ended at 4445-4455 so, it was more of a case of exaggerating it.

The second difference is the Delta Ratio, which was 39.0% on the 18th, way below the 50% mark, which indicates an upward bias.

Otherwise, it is probably even scarier than the last expiry as the Y1 ratio bandwidth currently stands at 335-points, and the overall Y ratio bandwidth at 535-points, a colossal 12%.

At the moment the SPX is still exhibiting signs of ultra-sensitivity (vis a vis the expiry on Friday) but, if this dissipates, then we really could see some big moves. And by that we do mean a lot bigger than yesterday’s 70-points.

Also, although we do admit we are currently dealing with extremely fine margins, it is looking possible that 4445-4455 could become the next zone in May as well, which means the market is actually above it at the moment.

 

Range:            4295  to  4495           

Activity:          Moderate

Type:              On balance only just bearish

 

 

 

Nb. Our comment for 04/26/22

 

Well, it is not very old this expiry, but boy, has there been a lot going on already.

We have been warning about the extremely wide Y ratio bandwidths, and now you have just experienced why.

But, firstly, obviously the zone hasn’t moved. And we think the reason for this has been because 4395-4405 has taken over as the new potential home for the zone, rather than our suspected 4445-4455.

Nevertheless, we think a move is still imminent. However, a lot may well depend on what happens now after yesterday’s extraordinary moves.

Now, R1 hasn’t moved throughout this expiry, and even before it became the front month, so we have had it at 4195 since the 13th April. So, no excuses for not knowing it was there.

However, we may give you a bit of licence as the intraday low was 4200.82, but not much, as after plunging all the way down from its zone on Friday (intraday high 4512.94), which is a drop of over 300-points in two days making the vega spike, so we are hardly surprised the market reacted a bit early.

And, the astute, would have also noted that the close on Monday was 4296.12, just a fingertip north of Y2.

Which brings us back round to the “what happens now” bit. Was yesterday’s 100-point rally just a knee-jerk reaction to encountering the dynamic delta inspired futures buying? Or have the bulls wrested back control?

Always difficult to tell we have found. The best scenario is that the market goes back down to R1. If the bears are in charge, it will test it again, and it’s still formidable, then its either put up or shut up. If the bears are lacklustre, or wavering, and the bulls are circling, then it shouldn’t need a second test.

Finally, don’t forget our strike three rule, as this may yet be pertinent.

 

Range:            4195  to  4495           

Activity:          Moderate

Type:              On balance bearish

 

Available to buy now

The faction account of the Big Bang, The Great Storm and the market crash of 1987, available in eBook and paperback here, a must read if you don’t believe in history repeating itself.

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April 20th, 2022 by Richard

The SPX May expiry has a couple of differences to April's, but probably the scarier for them.

 

Nb. Our comment from the 04/13/22   (Not published)

 

Nb. Our comment for 04/20/22

 

Firstly, we have to say what a tremendous and fascinating expiry the April one was.

Basically, if you can cast your minds back to last week, on Thursday 13th it jumped 49.14-points to close at 4446.59, which essentially enabled the settlement price to come in on that Friday at 4452.07, right in our zone. So, you can probably add remarkable to that superlative list as well, as with so little ratio around at all, you are talking fine-tuning to the “n’th” degree.

Anyway, looking at the ratio alignment in the new May expiry, which is in fact two trading days old now, and it’s basically more of the same.

Albeit, with a couple of noticeable differences. The first being, that immediately after the expiry, the SPX gave up everything it gained on the Thursday.

This just cemented the fact it was going to start May below its zone, which has remained unchanged whereas April’s zone ended at 4445-4455 so, it was more of a case of exaggerating it.

The second difference is the Delta Ratio, which was 39.0% on the 18th, way below the 50% mark, which indicates an upward bias.

Otherwise, it is probably even scarier than the last expiry as the Y1 ratio bandwidth currently stands at 335-points, and the overall Y ratio bandwidth at 535-points, a colossal 12%.

At the moment the SPX is still exhibiting signs of ultra-sensitivity (vis a vis the expiry on Friday) but, if this dissipates, then we really could see some big moves. And by that we do mean a lot bigger than yesterday’s 70-points.

Also, although we do admit we are currently dealing with extremely fine margins, it is looking possible that 4445-4455 could become the next zone in May as well, which means the market is actually above it at the moment.

 

Range:            4295  to  4495           

Activity:          Moderate

Type:              On balance only just bearish

 

Available to buy now

The faction account of the Big Bang, The Great Storm and the market crash of 1987, available in eBook and paperback here, a must read if you don’t believe in history repeating itself.

Posted in Uncategorized Tagged with: , , , , , , , , , , ,