SPX Holds 7650 (For Now)
Technically, an argument can be made that the market is destined for lower prices in the near-term. From a GEX perspective, destiny is less certain, with large (and therefore important) GEX levels still holding. Zooming out further, we recognize the VIX is still within the range that has marked support all year long, and a setup still exists for a VIX spike from this area.
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SPX May Retest Declining HMA at 7700
SPX shows conflicting perspectives: Technically, SPX looks weak, closing below the daily 15 EMA while already trending lower below the 9 SMA and the HMA. The next stop would be the 50 EMA on my chart, which is at 7555. We also see negative cumulative net options flow. But GEX paints a less certain picture: SPX holds above 7650, which appears bullish to 7700. SPX is still somewhat distant from the HMA, so a retest of 7700 would make sense as one possible avenue to solve the divergence between price and the HMA. GEX for this week isn’t suggestive (yet) of a larger move, so we will watch for a break or hold of either 7600 or 7700 in the meantime. Most of the GEX this week is concentrated between 7600-7700.
Key Levels: Bullish above 7650 targeting 7700, 7725. Bearish below 7650 targeting 7600, 7550.
Editor’s note- The 50-point increments are cheesy, but that’s what GEX shows. Sometimes reality is cheesy. Institutional managers controlling large amounts of money can be cheesy, but alas, they have the bigger stick.
QQQ Technically Hasn’t Touched 700, Stopped at Weekly 15-EMA
QQQ just couldn’t quite find enough bears (or panicked bulls?) to push it to 700, instead stopping approximately at the weekly 15 EMA with a 702.70 low today, rebounding from that point. QQQ is looking interesting from a contrarian perspective again, with a large gap between price and the HMA around 720, also a big GEX level. We will use 700 as our downside pivot and 705 as our upside pivot, with chop in between. This range is based on the big GEX clusters at 700 and 705. Above 705, we have 710 and 715 as high-probability targets, with 690 and 680 as potential targets below. A quick note on net versus gross GEX: We view net GEX (positive minus negative GEX) as potential targets, while gross GEX shows us potential support/resistance areas. While the total GEX picture for QQQ favors negative GEX at 660 and 680, this week’s GEX (displayed below) favors the positive 615-620 strikes.
Key Levels: Bullish above 705 targeting 710, 715-720. Bearish below 700 targeting 690, 680.
Does It All Boil Down to NVDA Earnings Wednesday After The Bell?
NVDA reflects expectations of a wide dispersion this week, with most GEX sitting in between 220 and 240. The relatively big drop Monday created a lot of distance between the current price and 220, so even if it’s a brief moment after NVDA reports post-market close Wednesday, my bet is that we see a retest of 220-230. GEX can be less reliable during earnings, so we need to keep that caveat in mind. I’ll view any test of 190-200 as a potential buying opportunity, though I think 208-210 will speculatively prove to have been an okay entry as well, at least for a trade.
VIX “Tree Shake” Over Prior 6 Days Looks Like a Move Is In The Making
The VIX seemed to be at the beginning of a meaningful bounce from yearly lows last week when it encountered an invisible resistance point overhead at the 16 strike. We see a lot of negative GEX at 16, but for days on end, we’ve also seen net positive option activity at strikes ranging from 19-22. The action we see with the daily candles looks more like racehorses being kept at bay by the gates on the track, which I think warrants attention in coming days. The VIX currently holds above the HMA, the 9 SMA, and the 15 EMA on the daily chart, so only a loss of VIX 15 starts to look like we may see a retest of 14. Options activity and GEX suggest 15 may be “it.”
Key Levels: Bullish (for the VIX) above 16 targeting 17, then 20. Bearish below 16 targeting 15.
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