Correction In Play: November 7 Stock Market Preview
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Travel circumstances prevented a YouTube video today, but we will try to post one tomorrow and we will resume regular scheduling next week! We will still conduct our free live stream presentation, so feel free to join us via our homepage link or our posted link in Discord around 10:30 AM ET.
We’ve been looking at the SPX weekly chart, noting the tendency for price to eventually test the 9-period SMA. We’re almost there, with 6686 marking the current point, also close to the big GEX area at 6700.
Today’s low was 6707, so theoretically close enough to count as a tag, though other factors (such as the VIX) certainly make it seem as though we have a good chance at pushing at least a little lower.
6600 and 6650 also look like areas of meaningful GEX, if we lose 6700. A spike below the 9-SMA may end up being a good buy for a move toward 7000 into the end of December, if GEX holds up with the current positioning.
SPX finally moved into negative GEX territory on a net total basis, and it can certainly move more deeply negative, if we are to continue lower.
QQQ is almost to its own 9-SMA at 604, with a very large GEX area at 600 just below as well. 580-590 are additional areas of interest for QQQ.
Technically, indices are a bit stretched below the daily Hull, so the odds of a bounce are increasing as we move lower, paradoxically.
The VIX is certainly a more bearish looking omen in my view, with the VIX rising on top of the bullish (for volatility) Hull Moving Average. Is another spike to VIX 25 in the cards? Perhaps even higher, if this decline evolves into something more than a typical post-April pullback.
IWM has the longest running downtrend of the major indices, going on two weeks, finally reaching the 240 GEX cluster.
Volume was highest at the 230 strike today, which also matches the lower Keltner channel, so an overshoot toward 230 is certainly possible.
One thing we want to watch with IWM in particular is the GEX Intensity Gauge, which compares current GEX to GEX readings from the past year on a relative basis. The intensity gauge shows us if GEX is relatively bullish or bearish, and it also reflects extremes, which can act as contrarian buy signals.
IWM reaching -2B or more in negative GEX might end up being a good place to buy, for example.
We’re already adding new long positions as we look ahead, but we also remain hedged, so let’s let the market tell us what is most likely as we approach the next few days. We’ll be sure to update our Discord channels with new GEX data as we enter tomorrow’s cash session.
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