The SPX zone eventually moves, but is this it?

At last the SPX's zone moves, but is it too little too late?


Nb. Our comment from the 02/08/22


As we said last week, the rally told us nothing until it reached its zone.

Which it did on Wednesday 2nd with the intraday high of 4595.31 just touching the bottom boundary of its zone.

The fact that the market is well below 100-points this level now just tells us how thin it all is out there, and that the bulls last week were just not interested in taking on any futures at all.

Unfortunately, after Wednesday it gets a little bit more complicated as, although the bulls are still waiting in the wings, it seems like so are the bears.

The real problem for us is the total lack of interest in getting the zone to move down to 4495-4505, and thereby confirming the down trend.

To make matters worse, it hasn’t really changed at all. So, a small push could easily still see 4500 become the next zone, but it seems practically frozen in time. Made all the weirder when you consider this market has been at or below it for the last three days, providing ideal conditions for it to actually decide.

Obviously, we would love this to be all cut and dried for you, but the fact remains that if the market doesn’t know what it wants to do then it will quite simply reflect that here.

We have seen a pickup in bullish activity over the last few days, but this has hardly been conclusive.

So, all we can say, is that being below its current zone the market is in bear territory. And that, as evidenced by the pullback from the zone, the bulls are currently in hiding.

However, there is one further aspect we should add, and this is that sometimes, just like the turning of the tide, you get that indecisive period where it just doesn’t know whether it’s meant to be coming or going.

Basically, watch this space, as we will let you know as soon as possible when we get something more definitive.


Range:            4320  to  4595           

Activity:          Moderate

Type:              On balance just bearish


Nb. Our comment for 02/08/22


When we said last week “to watch this space…until we get something more definitive”, well that was last Wednesday 9th. Basically, with the intraday high of 4590.03 falling just shy of the then zones bottom boundary, having tested it the week before with 4595.31, then this should have been the definition you were looking for.

Of course, many, including us, would have very probably waited until the open the next day, as it could have easily been one of those instances when they stop just shy (knowing full well what awaits them in real time) and then use the opening auction to leap-frog the problematic level. Although 5-points in this index is quite a gap.

Anyway, the rest is history as they say as we come onto our next point, which is that the focus this week, being rollover and expiry, is the zone.

And, as we mentioned in Monday’s comment on the FTSE that although their zone was below the market, here, even if the zone here moved to 4500, it would still be above the market.

The delay in moving persisted, and although it was increasingly obvious from Thursday last week, the actual move down didn’t occur until yesterday.

Happily coinciding with a bit of a rally, which sadly stopped short.

And this is part of the problem when the zone takes so long to move, although in its defence this is the first meaningful backwards move it has made in years, so perhaps a bit understandable, is that the ratios underneath continue to erode. Especially so if the market goes way below it.

The end result being that 4470-4480 is now where 4500 was a week ago, so perhaps it hasn’t stopped short? In fact, it could even be 4445-4455, such is the dearth of ratio.

And this is the big takeaway at the moment, by delaying the move down in the zone, the ratios below the intended target have eroded so much that the entire Y1 ratio bandwidth now stretches for an amazing 340-points. So, wherever the zone does end up, it will be a blessing that this index is even close to it as it could literally be anywhere within this enormous bandwidth.

The only other saving grace might be that the first triple of the year, the March expiry, may just affect proceedings to a degree.


Range:            4365  to  4495           

Activity:          Moderate

Type:              Neutral


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February 16th, 2022 by