VIX is Back to Positive GEX
Friday, SPX slightly outperformed QQQ, and the VIX headed toward 14.5, though not quite making it there yet. Looking ahead to OpEx week, SPX has a bullish GEX picture up to the 7900-8000 range, dependent upon holding any retest of the 7780-7800 range, in our view. The VIX has flipped back into positive GEX territory though, and lower timeframes appear to confirm 14-14.5 as a likely low for the VIX before another spike higher, so let’s look at parameters surrounding some tactical decisions we’ll be making in coming days.
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VIX 14-14.5 still Appear Likely, but Potentially SHort-Lived
The most interesting thing about the VIX spiking back into positive GEX territory as of Friday’s close is that such positive readings have often accompanied low points or pivots to the upside for the VIX since the beginning of August. Combine this factor with the relative low we see (given the VIX range this year) and we think there’s good reason for caution until we see GEX and the charts suggest lower lows for volatility.
-Primary scenario: The VIX drops to 14 or 14.5 Monday, then rebounds toward 16-18.
-Alternate pathway: The VIX spikes to 16, then fades back toward 15, 14.5.
Key Levels: Bullish above 15.6 targeting 16-18 initially. Bearish below 15 targeting 14.5-14.
SPX Looks Bullish into OpEx, Potentially Targeting 7900-8000
SPX net GEX expiring by Friday the 16th is largest at the 7900 and 8000 strikes, a bullish tilt into OpEx. The 8000 net GEX picture has shifted back and forth across the zero line more than once, so it’s worth watching that area as price either holds or folds at 7800. Below 7780 and we will likely reach 7750 or lower, so 7780-7800 appears essential in maintaining a positive bias toward 7900-8000.
-Primary scenario: SPX resolves a choppy early part of the week with a move to 8000, potentially testing 7780-7800 beforehand.
-Alternative scenario: SPX fails to hold 7800, dropping below 7738 and seeing a GEX adjustment toward lower strikes.
Key Levels: Bullish above 7800 targeting 7850, 7900. Bearish below 7780 targeting 7750, 7700.
QQQ Suggests Limited Upside, 756 is key to 760-770
QQQ has been lagging SPX lately, with semiconductors dragging the index down. We still see net GEX especially up to 760, with lower odds of reaching 770 as of now, and any move beyond the HMA at 756.70 could see a rise beyond 760. Downside support is important at 740.
-Primary scenario: QQQ retests the HMA near 757, possibly testing 760 before reversing.
-Alternative scenario: QQQ tests 744, then rebounds.
Key Levels: Bullish above 750 targeting 7755, 760. Bearish below 750 targeting 740.
IWM may still Test 270, 280 is key Pivot
IWM may want to retest those prior highs along the 270 range, also aligning with the lower Dealer Cluster zone and a big GEX bar at 270. A move beyond 280 will open the door to 290, 300.
-Primary scenario: IWM rejects at 280 again, drops toward 270.
-Alternative scenario: IWM retakes 280, rallies to 285 and the chart shifts more bullish.
Key Levels: Bullish above 280 targeting 290, 300. Bearish below 280 targeting 270, 265.
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