SPX may be Ready to Rip, VIX to 14.5?
I review our primary scenarios not to brag (there are often partial misses and sometimes complete misses), but I figure it’s worth pointing out that we’re combining GEX with what we’re seeing on our charts to increase the odds of getting it right. And maybe raise your level of interest in sending us some money as subscribers. I don’t beat around the bush, unless beating around the bush is part of a VIX spike ritual. Last night we said our primary SPX scenario involved a drop closer to 7700, then a rally toward 7850-7900. This still looks likely based on today’s close. We said our primary scenario for the VIX was a rally toward 17-20, then a drop to new lows. I’m not sure how this one is going to play out, but we did reach 16.5 today, and I’d like to see the VIX reach 14-14.5 before another spike, potentially beyond 17. QQQ may retest highs and IWM looks closer to a bounce.
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SPX Shows Positive GEX, Holding Above 9 SMA and HMA
SPX net GEX is still positive, comfortably in neutral territory. Today’s drop reached 7731, merely 3 points above the 9 SMA, then rebounded to close above the HMA, which looks bullish. The last 3 daily candles appear to be a bullish consolidation, in my opinion. GEX for this OpEx cycle (through Oct. 16) seems to agree, with 8000 representing the largest net positive GEX cluster, and potential targets ranging from 7850-7900 as well. From a speculative standpoint, I wouldn’t be surprised if SPX took the lead over the next week, especially given how much pain a lot of tickers have endured recently. Indicators also seem to suggest greater upside potential for SPX relative to QQQ. We’ll see how it plays out.
-Primary scenario: SPX retests and closes above 7800, potentially rising to 7850-7900 in coming days.
-Alternate pathway: SPX retests 7700, then rallies to 7800-7850.
Key Levels: Bullish above 7800 targeting 7850-7900. Bearish below 7750 targeting 7700.
QQQ Looks Technically Weaker, may Retest Highs into OpEx
QQQ is still quite some distance away from the HMA, which may actually be a contrarian reason to expect a move back toward that moving average, but QQQ importantly held pennies above the 9 SMA as of today’s close after testing the 15 EMA at 743. 760 is a clear OpEx GEX target, even with QQQ showing net negative GEX. Testing 760 again implies a potential overshoot of the HMA at 756, though the HMA is also rising, potentially aligning better with 760 sometime early next week.
-Primary scenario: QQQ moves higher to retest 755-756, then consolidates before moving toward 760-765 next week.
-Alternative scenario: QQQ dips slightly more, testing the big GEX cluster at 740, then moves toward 760 into late next week.
Key Levels: Bullish above 750 targeting 756, 760. Bearish below 745 targeting 740.
IWM Almost Tagged the 50 EMA, Relief Rally APpears Closer
IWM may still tag 270, which appears to be a big net GEX cluster, but today’s drop stopped 2 points above the 272.58 50-EMA, a line that has stopped previous pullbacks going back to June 2025. IWM’s extreme negative GEX is actually a contrarian signal, bringing to mind the analogy of too many people on one side of the boat causing the boat to capsize. Any rally in IWM may see stiff resistance at the 286-287 area for now.
-Primary scenario: IWM retakes 280, rallies straight to 285-286.
-Alternative scenario: IWM dips below the 50 EMA, reaching 270, then rebounds toward 280.
Key Levels: Bullish above 280 targeting 285-286. Bearish below 275 targeting 270.
VIX Closes Below HMA on Various Timeframes, 14-14.5 Retest can Happen
The VIX almost reached 16.5 today, pretty much in line with our thinking, and the rejection still leaves some air that can come out of the balloon down to retest the weekly HMA at 14.43. The HMA has turned slightly higher, and the VIX has been making higher lows on lower timeframes, so we still see risk of a larger VIX spike following the move into the low 14s.
-Primary scenario: The VIX drops to 15, potentially toward 14.5 before rebounding.
-Alternative scenario: The VIX retests 16-17 overhead, then drops back toward 15.
Key Levels: Bullish (for volatility) above 16 targeting 19-20. Bearish below 16 targeting 15, 14.5.
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