VIX Rejecting 17: The Coast Is Clear?December 3 Stock Market Preview
You can view today’s YouTube video here. Today’s YouTube video takes a look at SPX, IWM, WMT, and more, so check it out if you have a few minutes!
Today’s cash session was somewhat tame, with SPX and QQQ waking up a bit late in the day to move higher into the close, while IWM diverged negatively, closing in the red.
The VIX continues painting red candles daily since the late November high, though it’s noteworthy that we haven’t yet seen a lower low than Friday’s low.
We also fail to see negative GEX growing significantly below the 16 strike, and the Hull Moving Average is rapidly approaching the VIX, potentially setting up another reversal similar to what we saw in late October.
At this moment, any rebound attempt by the VIX may find resistance between 20-25, leaving room for the indices to reach upside targets into year-end.
In the short run, we see QQQ holding gains since the November lows, allowing the Hull to play “catch-up” while we also see GEX targets up to 640, potentially.
So far, the gap between the Hull and QQQ’s price has closed due to the Hull rising, which is a sign of strength, but we still see QQQ somewhat far above the Hull, so time still allows 1-2 days for either QQQ to pull back and test the line, or for the Hull to continue moving toward price.
QQQ closing above 620 places QQQ directly in the upper Dealer Cluster zone, so it’s unclear at this point whether or not 620 will now act as support for a push deeper into the box toward 630, or if we will see immediate rejection back to the 610 area we mentioned recently.
Glancing at SPX’s GEX Levels chart, we see net GEX reflected, emphasizing the significance of the positive GEX at the 7000 strike, a GEX cluster that we’ve been highlighting for several months now.
Most of that GEX is clustered at the 12/31 expiry, and it has remained through several recent pullbacks, potentially validating the likelihood of a closer approach to 7000 by year-end (or just after), as it has remained larger than other net GEX clusters.
The GEX at 6900 is also significant, and a first test at whether or not SPX will make a lower high relative to the October high or a higher high.
Any pullback that holds the 6750 Hull/middle Keltner channel area maintains good odds of reaching new highs by year end, in my opinion.
Looks like SPX’s net GEX dump yesterday was indeed a whipsaw, with a return to fairly solid positive territory occurring today. I still find the sharp changes from positive to negative and back to positive again to be unusual and worthy of attention in coming days.
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