FOMC fade, META Earnings Spike: January 29 Stock Market Preview
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The VIX saw a clean rejection of the down trending daily Hull Moving Average today, fading after a brief move beyond the 17 strike.
While a logical and anticipated test, what happens next is not so clear: We still see the VIX making higher highs and higher lows along a rough trendline back to December. Volume continues to be elevated at higher strikes.
The 2-hour chart shows a relatively tight range around the Hull since this week began, and the rejection at 17 leaves us with a slight bias toward the downside for the VIX, with 15 as a possible target.
Chances are that we’ll see some sort of decision made in the early morning hours when VIX futures open, so we’ll look forward to reacting to the initial move tomorrow with fresh 0 DTE GEX data at our fingertips.
Tech earnings after hours were a mixed bag, with META skyrocketing after hours while MSFT plunged. TSLA can’t make up it’s mind, opting for a “timidly bullish” rise.
Looking more closely at MSFT in particular, the drop to 450 after hours places MSFT within the lower Dealer Cluster zone and fairly close to the lower Keltner channel. This confluence suggests MSFT might be a buy in the morning, though we will also want to see any immediate shifts in the GEX picture. Will the large positive GEX at 500 remain? That would be a bullish sign, if so.
Retaking 460 would be very bullish in my view, potentially suggesting a trip toward the 500 target.
QQQ has reached just about the same distance away from the Hull that it saw during its recent drop, implying mean reversion back toward the Hull at 622.92 is possible from this point. Continued upside toward 640 is entirely possible, and for some time after hours, we saw QQQ over 636.
Any move toward 640 may be short lasting, or at least require some time moving sideways, given the distance above the Hull.
Similar story for SPX, which finally reached 7000 today. Both indices are within the upper Dealer Cluster zone, though the zone stretches higher, allowing for either failure here or a climb higher.
The October 29 top was also an FOMC day, so will we see a repeat with more downside tomorrow, or will META’s strength and anticipation of AAPL tomorrow after the bell be enough to keep indices afloat?
Our main theme at this moment continues to be limited upside, with immediate risk to the downside, though we don’t think the odds favor a downside move that would constitute anything beyond a “normal” pullback in a strong uptrend.
We’ll keep an eye on IWM too, but more on that tomorrow…We hope to see you in Discord!
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