Nb. Our comment from the 11/22/21
Welcome to the big one, the cumulation of everything done so far this year.
Although easily the biggest of the year, by a huge margin over the intermediaries but, even over the previous three triples, it is ahead by a very decent amount.
Therefore, by this very nature, it is more cumbersome and unwieldly which should be borne in mind. As should the fact that because it is so massive there is normally a significant uptick in the derivative related equity business, which more often than not gets misdiagnosed, but also means they get emboldened to take on higher ratio levels than they normally would.
However, just looking at the table above and the main issue is going to be the zone.
It is currently 6950-7050, which is actually lower than it was in the Nov expiry, but it could very easily move to 7050-7150 and there is even an outside chance of it getting to 7250-7350 further down the line during this expiry.
This means, to us at least, that where the zone is will play a crucial role for this trip so we will keep you posted as best we can.
Otherwise, the other critical levels to watch are R3 at 7350, as although R3 should not be particularly troublesome in the mighty Dec expiry it does have history and proved to be an important level in Nov. Then 7450 is a far more robust resistance level, and DR ratio amount of dynamic delta there is enough for even this expiry to sit up and take notice.
On the support side, well this will really be down to the bottom boundary of the zone. So, currently at 6950, but also keep a wary eye on 7050.
Otherwise, just enjoy the ride and surf along on the volume spike.
Range: 7150 to 7350
Nb. Our comment on 11/29/21
Again, yet another perfect example of why we start by repeating our previous comment (see above) as not only does it act as an aide memoire but, it also saves us having to reference it when our levels are hit.
We are of course referring to 7050, and last Friday the market dropped like a stone, some would even argue hitting terminal velocity it was so quick, all the way down to 7051.24, which remained the intraday low until the last few minutes.
And it was a spectacular bounce off this level, made all the more obvious by being on the end of a very long wick (if you are into candlesticks of course), ending up in a rally of about 70-points.
However, it is the end of the day that counts and so, with little surprise from a ratio perspective, it ended up safely in its zone.
This will make today a very crucial day, and both the upper and bottom boundaries now become very significant.
Of course, there is no way we could have predicted a new mutant variant strain, but in truth what the ratios tell you is what is possible, not the cause. If it wasn’t this it would very probably have been something economical for example.
Obviously, for sanity alone, we would love to see this market excitedly whizz around in its zone for the next two weeks. But, failing this, don’t forget below the bottom boundary it is bear territory, and so, should this market get there, this move will take on an entirely different complexion.
Back above the upper boundary, and we are just back to where we were. Although, there has been quite a shake up in the ratios, so there is a lot more minimal Y ratio around now.
Hopefully we will see soon enough, relax in its zone or will one or the other of the bulls or bears take control?
Range: 6950 to 7050
Type: On balance only just bullish