SPX Approaches a Likely Bounce, How Far?
We recently highlighted the VIX potential to spike to 17-20 as long as 15.3 held as support, and toda'y’s VIX high was 16.8. SPX closed Monday below 7700, and as we advertised, closing below 7700 would likely target 7670-80, 7650, then 7600. We can check off all of those boxes except 7600. While the odds of reaching 7500 appear favorable, the 7600-7620 area can see a rebound higher, in our view. Even if the bounce is temporary, a move to 7670-7700 is possible.
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SPX May be Targeting 7550-7500 as Long as SPX Holds Below 7670-7700 Resistance
SPX is now below all of the moving averages on my chart except the 50 EMA, so it’s not looking pretty. We would like to see SPX recapture 7670 (and even better, 7700) to resume discussion of 7800-7900. The net GEX picture (excluding today’s 0 DTE) shows 7800 and 7900 are still large net GEX clusters, but 7500 is even bigger, and net GEX overall is now negative. I view the daily Keltners and the chart pattern to still look constructive, and a dip to 7500 may be a gift of a buying opportunity, if it happens.
SPX 1-Hour Chart Appears Close to a Rebound Looking at This Week’s GEX
SPX’s 1-hour chart is almost to a point where I expect a spike: The lower Keltner is turning higher, the HMA is almost at the lower Keltner, and we have a big GEX cluster at 7600 as we look at GEX for this week. A rebound from the 7600 zone may first target a retest of the 9 SMA and 15 EMA near 7650, then 7700 after that. 7700 does look like a ceiling for now, with minimal GEX beyond 7750, yet 7550 and 7500 loom large below.
Key Levels: bullish above 7600 targeting 7650, 7700. Bearish below 7600 targeting 7550, 7500.
QQQ May Aim for a Retest of 700, Two Pathways Emerge
QQQ shows two pathways that I think may sense: A drop to 700, then a rebound to 710-715, or a rally to 715, then a potential drop to 710, 700. In such cases, I personally prefer waiting for the first move to be chosen while I watch as a spectator, giving me more confidence in positioning for the second move. QQQ holds potential to rise as high as 720-730 if 700 continues to hold as support.
Key Levels: Bullish above 710 targeting 715, 720. Bearish below 710 targeting 700.
The VIX APpears Set for a Pullback Soon
The VIX may give some hope to market bulls, with the 2-hour and 4-hour charts both showing fairly neutral Keltner channels as the HMA is quickly rising toward the top channel. We also see the %b indicator already at 1.0, an area that generally represents topping zones for the VIX. If the VIX loses 15.75, the odds of a move back to 14.5-15 increase a lot, in my view.
The VIX can Still SPike Toward 20+ as long as 15 Holds
Today was the first day in 5 days where the VIX closed above the daily HMA, and we see risk toward 18-20. But given what we see on the 4-hour chart above, and the distance above the 4-hour HMA, the VIX very well could retest 15 and still maintain potential for higher levels. Vomue at the 30 strike was noteworthy today, and we have seen GEX shift toward 18 as a large GEX “ceiling” at the moment. With the upper Keltner channel aligned with the largest net positive GEX cluster at 20, can we see the VIX push through resistance to make it to 20? We hope you’ll join us in Discord where we’ll share what we’re seeing in real-time.
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