VIX Spike Risk into Final Days of Q3
The risks we’ve been highlighting regarding the VIX turning higher and the risk of SPX tagging the 7600s appears to be in play, though even we were a little too optimistic on our 7700 retest as our “primary” scenario. SPX closed at 7683.93, below the daily HMA and below the large 7700 GEX area, so it’s not looking great at first glance. The GEX picture isn’t overly negative, and we’re entering the final days of Q3, so let’s look at what we view as key levels for this week.
Interested in getting access to our tools and most active Discord channels? Save $300 off of the annual Portfolio Manager plan with code SEPTEMBER26 at checkout!
SPX may Reach 7650 or Possibly 7600, Odds Favor Buying the Dip (for now)
Our key levels from yesterday’s newsletter mentioned “bearish below 7725 targeting 7700, then 7675.” SPX accomplished all of these downside targets Monday, closing 8 points above the 7675 level after testing slightly lower levels intraday. Today’s close also saw a brief drop into slightly negative GEX territory before rebounding back to positive GEX after the closing bell. We now see the net GEX picture shifting to indicate large GEX clusters at 7650-60, then 7600, which is the largest net GEX cluster shown when filtering for this week’s GEX. The final days of Q3 and the beginning of Q4 can see some whipsaw action, so let’s look at our highest-probability scenarios:
-Scenario 1: SPX tests 7600 (at worst) or 7650, then rebounds toward 7800.
-Scenario 2: SPX retakes 7700, climbs toward 7800, then consolidates around 7750-7800 before continuing toward 8000.
Key Levels: Bullish above 7700 targeting 7800. Bearish below 7700 targeting 7650, then 7600.
QQQ Still Above 730, We’re Watching 725 if Downside Continues
QQQ is below the daily HMA, and we don’t see much GEX above 745. The upper daily Keltner channel at 760 is theoretically a target, but we’d prefer to see growing GEX toward that strike if it’s going to become a near-term target. GEX seems to indicate that 725 is likely to be tested according to the weekly chart, and we do see some GEX at that strike. QQQ needs above 743 to see a move to 760.
-Scenario 1: QQQ drops to 725-730, then moves toward 745, then we reassess if we’re likely to climb higher or consolidate.
-Scenario 2: Immediately move toward 745-755, then drop to 720-730.
Key Levels: Bullish above 743 targeting 745, 760. Bearish below 735 targeting 725-730.
IWM has Risk to 270, Positive Divergences Exist
A few days ago, we discussed IWM’s propensity to tag the 50 EMA on larger pullbacks since June 2025, and we’re still a few points away. GEX is negative for IWM, but we still see squeeze risk higher, though IWM may first tag the 50 EMA near 272. Flow was positive, a nice divergence for IWM, and IWM is getting a bit extended below the 289.89 HMA.
-Scenario 1: IWM tags 272-275, then bounces to 290.
-Scenario 2: IWM immediately rallies to retest 290, possibly overshooting to 300 before a larger downward move.
-Scenario 3: IWM overshoots the 50 EMA and continues toward the lower Keltner channel at 260.
Key Levels: Bullish above 280 targeting 290. Bearish below 272 targeting 260.
The VIX Flips Back to Negative GEX, Another Sign of an Incoming Relief Rally?
The VIX almost reached 17 today, our “scenario 1” listed in yesterday’s newsletter, testing the key 16-17 area we view as a pivot toward higher VIX levels. The HMA is quite far below the VIX, right next to the big GEX cluster at the 15 strike, bringing attention to 15 as a possible VIX pullback/reversal area in the event the VIX plans to continue toward 20. VIX net GEX flipped negative, which has recently happened at VIX peaks.
Scenario 1: drop toward 15, then move toward 20.
Scenario 2: VIX spikes toward 20, indices put in a meaningful bottom and rally into Q4.
Scenario 3: Drop toward 15, then rebound in a tight range between 15-17 for a few days before the next decision.
Key Levels: Bullish above 16 targeting 20. Bearish below 16 targeting 15, then 14.
Join The Discussion
Non-subscribers can join our great Discord community with all of its experienced traders by clicking 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.
Our YouTube videos can be viewed by clicking Community at the top of our homepage to find the channel link. We posted a new YouTube video tonight discussing major indices, including a comparison of SPY and SPX, and BTC as it relates to volatility, so give it a look!
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. We also post a link in Discord when we’re ready to start.
We now have a live demo on our homepage for those who want to explore the main sections of our website, so we invite non-members to check it out!
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.
