Of course we would have liked to see the SPX inside its zone for the rollover and failing that for the settlement, and the ratios have done their bit with the NZ moving up to 2445-2455 as anticipated.
However for such an active week we can’t remember having ever seen such a relaxed market.
The last 4 closes are all within 13 points, which is next to nothing and more to the point the daily range can only just about average 8 or 9 points, which is virtually nothing.
If it is happy then what can we say but glad to see it although this is definitely a new twist to us.
Range: 2455 to 2485
Type: On balance decidedly bearish
It could just be that July is not that bothered as it is already anticipating August and where July started hitting R1 originally at 2465 last Friday here it does not even start until 2495.
On top of that, and which is the entire point, the ratios only go up to R2 so it is bit of a vacuum at the moment.
The flip side is that although the NZ is very likely to move up we still don’t get the corresponding R1 ratio level until 2370 so there may well be scant resistance but there is equally no support for a very long way.
Range: 2430 to 2495
Type: On balance just bearish
The adage “no prisoners” comes to mind as that’s what has happened as even up to the end we are seeing very high levels of activity.
So much so what was Y2 yesterday becomes today just the upper boundary of the NZ which bounds ahead a massive 100 points to coincidentally embrace the market.
The ratios are a product of activity and are purely arithmetic and we just crunch the numbers and interpret, although here we don’t think there is any need of a translator.
Range: 5875 to 5925 or 5925 to 5975
In keeping with the trend the NZ in August has also moved up although to be fair with so much Y1 around still it could end up anywhere.
For example the step-up level within the Y1 ratio bandwidth above the zone remains at 6025 which is still 100 points above the current market let alone the actual Y2.
This in itself is not too bad but when you consider this index is on day 10 of closing up having added 322 points over this period and it is still that far away then it really shows how thin it really is here.
Range: 5825 to 6075
Type: On balance just fractionally bearish
The lackadaisical nature of the SPX we suspect has impacted the DJX leaving it close, just over 50 points from its upper boundary, but with no great desire to do that much about it.
Considering the close here on Monday was 21629 it has hardly moved all week, so like we said with the SPX it looks content to be here.
Although we should point out that an almost 6% jump in the NDX over the last couple of weeks must have placed a considerable degree of upward pressure on these two indices so to finish even close is actually doing quite well really.
Range: 21500 to 22100
Type: Not bullish
In August we suspect a lot will depend on how involved the DJX decides it wants to be.
In July it spent the first 4 weeks in its zone and saved the market by refusing to break down below it so the close today will be vital.
Basically a close inside its zone and we are back in the same familiar territory as the last expiry but if it closes above then it will have to make a choice.
If it is forced to make a choice then the appearance of R1 replacing Y2 at 21700 may well have an impact, so it looks like the ball is firmly back in the DJX court.
Range: 21500 to 21700
Activity: Off the scale