Signs Of Weakness, No Key Downside Breaks..Yet
QQQ significantly underperformed Thursday, led by the semiconductors to the downside. Mag 7 names weren’t strong enough to save SPX, though SPX did only fall -.5% compared to over -1.5% for QQQ. IWM was a bright spot, essentially closing flat despite the VIX spiking over a key trigger area to close at 16.73. We may see more downside ahead, but as long as SPX remains above 7480, the potential remains for a spike to 7600, now looking more likely to be accompanied by a lower high for QQQ, and potentially a new high for IWM.
Members save $300 on the annual Portfolio Manager plan with code SUMMER26 at checkout, which will run a few more days.
QQQ: Positive Cumulative Net Flow Versus Negative GEX
QQQ is still above 700, though we have to wonder how many times we will see tests of 700 before it breaks. A contrarian view is that we could see a close below 700 that is close enough in proximity to justify a gap back over 700 next week after dealers have killed all of retail’s call options (I know, it’s a mean world out there). SMH is falling apart, but even downtrends see vicious bounces sometimes, so the “easy” money might have been made on SMH- for now. We will have to consult with the 0 DTE GEX picture once Friday’s cash session opens, but until then, we will keep the following views in mind:
Key Levels: 711-716 chop zone, bullish above 716 targeting 720, then 730. Bearish below 694 targeting 690, 680, 660.
IWM Behaving Stronger, Risk To 280 REmains
IWM closed above the daily HMA, though we see some wicks overhead potentially indicating eager sellers on efforts to push higher, so we’re aware of the risk to retest 290, then potentially 285-280. Big negative net option flow is visible at 280. GEX still allows for a move to 300 as long as 290 holds.
Key levels: Bullish above 295 targeting 300. Bearish below 290 targeting 285, 280.
SPX: 7480 Test Before 7600?
The picture below shows Friday’s GEX in particular. Keep in mind SPX has 2 expirations tomorrow: A.M. and P.M. We may see GEX shift a lot after the morning expiration, so where we open and the early action may not be indicative of exactly how the rest of the day goes. So far, SPX is still holding where it needs to, maintaining the 7500 support despite closing a few pennies below the daily 9 SMA. We’re looking at a move to 7600+ over 7569, while a retest of 7480 (the weekly 9 SMA) is possible below 7500.
SPX Still Needs To Make A Decision
Today saw interesting cumulative net option flow, with negative flow at 8000 and positive flow at 7000. A number of explanations may exist for such flow, though I have to wonder if there’s any tie to the possibility of more downside before a rebound later in the year to then test 7800-8000. The weekly HMA at 7621 looks like a ceiling until proven otherwise, or until GEX suggests otherwise, but right now, a lot of GEX rests at 7600 relative to any strike above it (until you get to 8000). A loss of 7479 opens the door to 7400 and then 7339 or lower, so the action around any drop to 7479 is important to our view.
Key Levels: Bullish above 7569 targeting 7600, 7621. Bearish below 7500 targeting 7480, then 7339.
The VIX Shows Increasing Risk Of A Spike To 20
The VIX HMA is now pointing higher as the VIX is above the HMA, the 9 SMA, and the 15 EMA, so we now have increasing odds of a move to 18-20, if not higher. For several days this week, we’ve seen positive cumulative net option flow at higher strikes, especially at the 19 strike, and the 25 strike today in particular. The last line I’m watching to ignite that stronger move higher is at 17.07, the weekly 9 SMA. A drop below 15.75 may imply a rally for indices and a drop in the VIX to the low 15s or even high 14s, so a pivotal moment is upon us as the VIX presses against the last potential indicators on my chart holding it back. We hope you’ll join us in Discord Friday where we will share more than usual in our free general-chat channel in the absence of our livestream presentation, which will resume on Monday.
Key Levels: Bullish (for the VIX) above 17.07 targeting 18-20. Bearish below 15.75 targeting 15-14.75.
Join The Discussion
We hope you will join us in Discord this week, where we share at least some observations every day for free.
Our YouTube video tonight covers SPX, QQQ, the VIX, NVDA, and AAPL, so check it out! Tonight’s video and prior videos can be viewed by clicking Community at the top of our homepage to find our YouTube channel link.
Non-subscribers can join through 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.
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. Our next livestream will be Monday, July 20.
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.
