Nb. Our comment from the 07/24/20
At least, after today that is, we will have gotten rid of the “spare” week, and business can get back to normal.
What we mean by this, is that the “spare” week is the fifth week of this expiry, as more usually there are only four, so, more often than not, the extra week, taken at the start of the expiry, not the end, can be bit of a non-entity.
And, looking at the ratios above, especially below the zone, you would be excused for thinking just that.
However, between publications, RI has been up to 2920, and R2, climbed to 2820 and then 2845, before falling back today, to, rather ironically, below where it was.
Also, the activity is slightly misleading, as it has been pretty good, until today, of course.
More importantly, especially as the market is above its zone, the ratios here have continued where they left off, which is still weakening, despite the type of activity.
The market, however, has been happily ensconced in the Y2 ratio bandwidth, until yesterday’s fall.
Annoyingly, we never saw the market test R1, which was at 3305, a level that today, will still be what we call, a step-up.
So, what we said on Tuesday, still holds very true today, insomuch as the zone will move up (probably to 3195-3205), overall activity still pathetic and the Y ratio bandwidth is still a panic-inducing 415-points wide.
Yesterday’s 57-point move is therefore really very benign, as the ratios tell us that 2% to 3% moves are eminently possible, and should be expected.
Range: 3105 to 3310
Nb. Our comment for 07/28/20
Well we have to hold our hands up here, as there is no way we would expect just 20 or 30-point daily moves in the SPX whilst it is this neck-deep in the minimal Y1 ratio.
Actually, it gets worse than that, as the opening price on this expiry was 3224.29, so, on last nights close, all it has done is move an insignificant 10-points.
We think it is lucky, insomuch as there is such a huge degree of apathy, as the Y ratio bandwidth now stretches for a massive 425-points.
That’s 13% overall, but if you look at it from where the market is currently, there is 81-points upside, but 344-points downside.
Lucky if you’re a bull that is, not so much if you are a bear.
Eventually, this market will snap out of its doldrums, so please don’t get lulled into this false sense of serenity, as when it does, it really could move.
Otherwise, it is pretty much the same as it was last week.
The zone will eventually move, probably to 3195-3205, and the ratios continue to weaken above it.
The small change, is the rate of weakness has dropped noticeably, and the ratios below the zone have stopped rising, and are now static.
Small, but perhaps significant, although only time will tell us if this is due to a change in sentiment, or just the result of the all-prevailing apathy.
It is worth mentioning, that in our trading range below, the bottom is the upper boundary of this index’s zone, and we have all seen how influential this has been in the FTSE recently.
The other point, is we haven’t mentioned Y2 at 3280, slipping from 3265, as a market this sensitive, could easily react to even this minor level of ratio.
Range: 3105 to 3320