SPX Reaches Extreme GEX Reading- Reversal Imminent?
SPX reached for 7800 today, the upper end of the 7700-7800 range that GEX previously identified as likely heading into OpEx. We saw a meaningful reversal from the intraday highs, and the VIX was positive for much of the day, unusually so for a Thursday where the market was higher. The extreme GEX Intensity Gauge reading above 2.5B might be a sign of a top in the short run. We also discuss an unusual insider purchase of BSX, which is coincidentally at a relative low point.
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SPX Reached An Extreme Positive GEX Reading, Possible Contrarian Signal
Our GEX Intensity Gauge compares current GEX readings to prior readings over the last year, and today’s reading was in the extreme category, over 2.5B. Such readings often indicate consolidation or short-term topping areas, which we discuss further in the next paragraph.
Negative Flow, Extreme GEX, Retest Of The HMA Present A Short-Term Bearish Possibility
The larger view on SPX as we look toward OpEX on August 21 is positive, potentially targeting 7900-8000. But today’s action was negative, in my opinion. We see large net negative option flow at 7800, today’s intraday high testing the daily HMA from below (failure at resistance), and a close below the large net GEX cluster at 7800. A move above 7816 looks bullish toward 7850-7900, failure below 7750 likely sees a move toward 7700. Downside still appears to be limited at the current time.
Key Levels: Bullish above 7816 targeting 7850, then 7900. Bearish below 7750 targeting 7700.
The VIX Reaches Extreme Downside Targets- Reversal Imminent?
The VIX is essentially at lows of the year, but importantly, we see the VIX crossing above the HMA, and any move above 15 may trigger a move toward 16-17, given the large negative GEX at 15. A look back at December 2025 shows that the huge uptrend that started in December was the lowest point since December 2024, so VIX weakness may be worthy to heed as a contrarian signal when compared to prior patterns and levels.
Key Levels: Bullish above 15 targeting 16-17, then 20. Bearish below 15 targeting 14.
LOnger Term Highlight: SIgnificant Insider Buy At BSX
Our new Investor tier subscription (also included with Analyst and Portfolio Manager) aims to focus on quantitative analysis on a 3-5 year horizon, including congressional and insider trades. Our proprietary model looks quite favorably on BSX, which is far below the lower end of our valuation bands, and we view the stock as a prime opportunity as we consider all of the factors included in our model. A recent trade by Michael Mahoney (take out the A and H and all you see is Money) caught my attention. He bought $9 million worth of stock at 48.33 in August. Statistics show insiders outperform the market, and I like the agreement of his purchase with our assessment as well.
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