SPX GEX Turns Bullish, but Wide Range Indicated
GEX shifted into solid positive territory for SPX as price pushed higher Wednesday, increasing the odds of continuation higher into year-end. The VIX stopped its decline just above a key trendline, while indices closed below key resistance. Combining the two seemingly contradictory data points, we may see a pullback soon that resolves toward the upside.
Interested in getting access to our tools, trades, and our most active Discord channels? Save $300 off of the annual Portfolio Manager plan with code PUMPKIN300 at checkout!
SPX Net GEX Almost Evenly Spread Between 7600-7900 for the Next two Weeks
SPX closed below the 1-hour HMA by less than 3 points, and with futures lower, we can see that the close below the line mattered. The Keltner channels have turned higher, so any pullback on Thursday may be a dip buying opportunity. We see most of the net GEX for this week and next week spanning 7650-7900,with gross GEX at 7750 and 7800 potentially acting as gateways for momentum toward the largest net GEX cluster in either direction.
-Primary scenario: SPX retests 7700, then rebounds to 7750.
-Alternative scenario: SPX gaps up to 7800, then drops toward 7750 before continuing to 7900.
Key Levels: Bullish above 7761 targeting 7800. Bearish below 7750 targeting 7700, then 7650.
QQQ GEX is still Negative, 710 and 700 are the Largest net GEX Clusters
QQQ also narrowly closed below the daily HMA, with futures testing 715 as I write this. 710 is the next target, followed by 700, two levels that GEX has advertised in advance, as we’ve shared in this newsletter yesterday. A move above 730 raises odds of a quick 740 retest.
-Primary scenario: QQQ tests 700, then begins a big rebound into Q4.
-Secondary Scenario: QQQ rallies toward 735-740, then drops toward 700.
Key Levels: Bullish above 730 targeting 740. Bearish below 720 targeting 710, then 700.
IWM Distance from HMA Suggests Pullback Risk, Limited Upside to 280 NEar-Term
We discuss IWM in tonight’s YouTube video, with the main points being that we expect IWM to rebound strongly, but the distance from the HMA and the high relative GEX reading have signaled pullbacks in the past. We view 270 as being on the table, with risk to 280 above that area.
-Primary scenario: IWM drops to 270, then begins a rebound that reaches 280-290.
-Alternative scenario: IWM drops to 270 and keeps dropping, reaching the 260s.
Key Levels: Bullish above 280,bearish below 270 targeting 260.
The VIX Crossed over the 1-Hour HMA, Buy Signal for the VIX. Lower High?
The VIX saw a negative GEX reading for the 2nd time in two days, but the VIX is reaching a lower support area (alongside oversold conditions) that suggest we could see an attempt higher. 18 represents a lower high initial target, with 20 being possible beyond 18. We’ll reassess if/when we start to see an upside move for the VIX beyond 18.
-Primary scenario: The VIX rebounds to 18, maybe 20, then drops to new recent lows as indices climb higher.
-Alternative scenario: The VIX tests 18, then rebounds toward 20, then keeps going, reaching 30-35 (nightmare Groundhog Day scenario).
Key Levels: Bullish (for volatility) above 18 targeting 19-20. Bearish below 16.5 targeting 15 or lower.
Join The Discussion
Non-subscribers can join our great Discord community with all of its experienced traders by clicking Community on our homepage. First-time guests get a free 7-day trial of the premium Discord channels, where we talk through what is happening in real time.
Our YouTube videos can be viewed by clicking Community at the top of our homepage to find the channel link. We posted a new YouTube video tonight discussing major indices as well as some individual stocks, so check it out!
Join our livestream by clicking the link on our homepage every day around 10:30am ET, and you can replay the most recent one any time before the next one begins. We also post a link in Discord when we’re ready to start.
We now have a live demo on our homepage for those who want to explore the main sections of our website, so we invite non-members to check it out!
Thanks for being part of our community and know that we invite and appreciate your feedback!
The information provided by Geeks of Finance LLC is for educational purposes only and is not intended to be, nor should be construed as, an offer, recommendation or solicitation to buy or sell any security or instrument or to participate in any transaction or activity. Please view our Investment Adviser Disclaimer and Risk Disclosure.
