The DJX regains its zone.

Nb. Comment from 05/29/19

It is very difficult to appreciate that this is in fact a triple witch expiry, or quadruple as the US likes to call them, as the activity remains so low.

The level overall is much more befitting a biggie, but it all looks passive.

And, we are back to that ridiculously wide zone.

However, and as we pointed out, the bottom boundary is hugely significant.

Last Thursday, the 23rd, this index got as low as 25328 before finishing at 25490.

At the time we mentioned how statistically irrelevant 10-points is on a twenty-five-thousand-point index, and the opening gap up the next day just went to underline this.

The fact that the next day, Friday, the intraday low was 25496, was also very telling.

So, yesterday, it was looking good, but right towards the end the market got spooked, and, hey presto, strike 3.

The only good news is that the next level of support is actually rather close, and it jumps straight in at R2, please see above table.

Otherwise, it’s going to be all down to the SPX, please see our previous comment on the 21st May, and from our calculations on the 28th R2 here is still at 2770.

The expiry still has a very long way to go, but it is heating up nicely, and now we are testing levels, both in this index, the DJX, but also the SPX, this will ignite activity, if only because of the dynamic delta, so the fun starts now, for us at least.


Range:            25000  to  25500              

Activity:          Very poor

Type:              Neutral

Nb. Comment on 06/07/19

Well, we certainly hope you are having fun by now.

Shortly after our last comment the bottom boundary did indeed cave in, and as it was already on strike 3 this was hardly a surprise.

This then left R2 at 25000 as the next line of support, and if the SPX was having a titanic battle with their R2, the DJX was certainly not being overshadowed.

Last Friday and on Monday this index closed at 24815 and 24819 respectively, which was very troubling as both were deep inside their R2 bandwidth.

The only saving grace was that on both days the SPX was just then hitting their R2.

It seems it was the SPX that turned the tide, although with this index being in their R2 then it would most certainly have aided and abetted.

It is a triple, so big numbers are more likely than not, but it is worth bearing in mind that the strength of the bearish sentiment took two indices in R2, which is a lot of dynamic delta futures buying, to eventually turn the tide.

The fact that this index bounced straight back up into their zone is only what we would expect, and the same goes for the SPX.

The unexpected part is how much Y ratio there still is in both, especially as this expiry is a triple, where we would expect to see none, or at least, very little.

The only ratios to change here are Y2 drops to Y1 and DR comes in to 24000, both below the zone.

As it stands this index is now back in its super-wide zone, so happy days, but the real battle will be the SPX we believe, and there, might it even get back to bullish territory?

Range:            25500  to  26500             

Activity:          Moderate      

Type:              On balance definitely bearish

June 7th, 2019 by