Nb. Our comment for 10/09/24
We do sincerely hope you paid heed to what we said last week, as that was quite some ride.
We didn’t need to have worried about whether or not Thursday 29th August was or was not another test of R1 at 5655, as the market never went there again. So, whether that was two or three tests is now a moot point.
However, there is no denying that the SPX is “still maintaining its rather unhealthy relationship with R1”.
As Wall St. was closed on Monday 2nd September, it only took three-days to traverse across the entire Y ratio bandwidth to go from one R1 to the other corresponding R1 at 5395.
Albeit with a pitstop on the Tuesday, after it bounced off Y2 at 5495 with the intraday low of 5504.33.
Friday saw the intraday low of 5402.62, clearly getting considerable support from all the dynamic delta from R1 at 5395, as it spent a very considerable time there throughout the day.
So, no surprise to us at least, with the bounce this week but, the real question, is what’s next.
The problem here, is that there have only been a couple of changes in the ratio table (R3 & DR below the zone), and they were at least four-days ago.
This means there has been virtually no movement and so no clue as to which way the pendulum might now be swinging.
On top of which, there is still two-weeks to go, so all this is about a week too early to get the perfect expiry, which would now be to see the settlement in the zone. As the market is still entrenched in its Y ratio bandwidth it could whizz around very easily with minimal interference. The best outcome, would be for it to get back to its zone and then decide.
Range: 5395 to 5655
Activity: Only just registered
Type: Not bullish
www.hedgeratioanalysis.com
Nb. Our comment for 03/09/24
Can’t quite make up its mind, but in the meantime the SPX has still maintained this rather unhealthy relationship with R1.
Apologies for not posting last week, especially as we now realise that this is the first you would have realised that R1 above the zone has moved to 5655.
In fact, it did this way back on the 21st August, which gave the market the green light to move past 5605 of course.
It was a very significant change as well, as had you known that R1 was standing at 5655 then you would have appreciated why the SPX topped out where it did on three of the five trading days last week.
The exceptions being the Tuesday and Wednesday when it only got to 5631.18 and 5627.03 respectively.
Other than this, there have been a few other changes, easily seen in today’s table, but none nearly as impactful.
Looking ahead, and obviously R1 at 5655 is the critical level and it has now been tested thrice, although there is bit of a question mark over Thursday, so it’s now just a question of how resilient it can be.
The problem for us, is that the intraday lows last week were 5602.34, 5593.48, 5560.95, 5583.71 and 5581.79, which were all in the Y ratio bandwidth, and by some considerable margin.
The point being, is if the bulls were that committed it wouldn’t pull back that far, but rather keep knocking on R1’s door.
If it can get past R1, then there is 70-points before R2 but, worth noting, there is a considerable step-up in the ratios at 5705.
However, the real aspect to be very aware of, is that the corresponding R1 level doesn’t start until 5395. It’s your risk profile but, for us, that’s too rich.
Range: 5555 to 5655
Activity: Poor
Type: Neutral
www.hedgeratioanalysis.com
