SPX Turning Higher? January 27 Stock Market Preview
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The VIX was kept at bay today, filling Friday’s gap and holding right around that area. Today’s close above the rising Hull Moving Average on the 4-hour chart leaves open the possibility of a VIX spike toward 18-19, though a retest of 15.60 may also be in the cards, so we’ll watch action if we see a drop toward 15.60.
Even if we see a spike toward the 18-19 zone, the VIX is below key daily resistance and the weekly Hull is still declining, so a magnetic pull back toward 14 may ultimately happen.
With MSFT, META, TSLA, and AAPL reporting this week, and the FOMC announcement Wednesday, we remain open to potential outlier moves, though any move becomes harder to predict, in our view.
A glance at DIA seems to validate some sort of bullish resolution for the indices, with the Keltner channels bullishly pointing higher, price above key moving averagesm and a prominent positive GEX cluster at 505, the upper Dealer Cluster zone.
With all of the ingredients in place for DIA to rise, it wouldn’t be a surprise to see either the FOMC or perhaps one or more of its biggest holdings spur a rally toward that 500-505 area.
A loss of 490 increases the odds of a short-term trend change, with 480 as the target in that case. We’re still leaning toward the upside scenario first.
IWM began a decline at the approximate area where we expected one, and it remains to be seen whether or not we will go straight for 255-260 or if we will see a bounce.
The daily Hull is close to 269, which is far enough above the current price to expect a retest of the Hull any day, bringing IWM close to 270 again.
At this moment, I’m not necessarily sold on IWM going straight to 275-280 without more of a pullback, so we need to watch what happens around 269-270 on any rebound attempt we may see surrounding FOMC or thereafter.
QQQ closed above the weekly Hull, a good sign for bulls as 630-650 becomes in focus as a destination for QQQ in the event of a breakout from this consolidation.
All eyes will be on tech earnings and FOMC to potentially break QQQ out of this zone.
620 remains key, which isn’t far below, so the next few days will require close watching of the 0 DTE GEX picture to give us the best shot of staying out of harms way.
SPX saw a bullish increase in net GEX, almost out of the neutral zone and increasing the odds that we might have seen a short-term bottom on the 20th.
The focus on 0 DTE and weekly options does mean that we can see large GEX swings in both directions, so having better odds doesn’t equal a guarantee, of course.
SPX is holding above the daily Hull, and we are still staring at the 7000 GEX cluster as a likely target above 6950.
Of course we see today’s close right at 6950, leading us to reliance upon the 0 DTE GEX picture tomorrow for clues as to what’s next, similar to QQQ.
We’ll watch intraday shifts in GEX closely and we’ll keep this discussion going in Discord, so we hope you’ll join us!
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