Will The Rally Continue? February 10 Stock Market Preview
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SPX almost reached 6980 for today’s intraday high, once again getting close to the important GEX cluster at 7000.
QQQ reached the 615-620 zone we believed to be a likely target and decision zone, accompanying SPX as it surpassed the 6950 area that I suspected as a potential target. SPX’s close was just under the key weekly Hull Moving Average (HMA) and within the upper Dealer Cluster zone.
While we won’t share the daily chart tonight, note that SPX is well above the daily HMA, bringing 6916 into focus on any potential pullback.
QQQ topped out today at 616.46, well within the cluster of moving averages and GEX zone we mentioned as a possible target yesterday. The close above the HMA is not yet convincing in my view, with the 9 SMA and 15 EMA just overhead, and all of the MAs on my chart are still declining.
QQQ needs to overcome 620 with a daily close above that GEX zone to be more convincing of a bullish move higher.
While SPX’s net GEX increased today, QQQ saw a decrease, a contrasting picture that at least introduces some uncertainty as to what happens next.
Our base case yesterday was QQQ continuing to hit the 615-620 area, then a pullback, so now we need to see if the roadmap leads that way or not tomorrow.
As long as 600 holds, the large GEX cluster visible on the chart above (and the lower Dealer Cluster zone), the technical picture will allow for a recovery to new highs, so we want to see where any upcoming pullback stops and what happens from that point.
IWM looks quite bullish, bouncing more strongly than other indices and the upper Keltner channel is pointing up aggressively.
IWM is a bit extended above the daily HMA, and we’re in the upper Dealer Cluster zone, where dealers might become sellers, so ideally, we’ll see a pullback that once again holds the 260-261 area on a daily close and then IWM may be able to continue toward 275-280.
Breaking below 260 opens the door to testing 250, which looked more likely last week, but we still need to be open to the possibility.
It’s worth noting that the January 22nd GEX high was also the approximate high for IWM’s price, with a drop beginning right after that high. Will today’s close back in positive territory see a similar pullback, or will we see GEX climb higher from here?
The VIX had a near-perfect tag of the middle daily Keltner channel, so far holding the key uptrend established since December 23-24.
The scenario where we see indices pull back at this point- but then continue higher- would likely mean the VIX makes a lower high, then reversing and heading back toward the 14-15 area.
The untagged GEX cluster at 25 deserves consideration, with 23 having been hit last week, and volume+GEX remaining at that 25 strike. The Keltner channel looks bullish for the VIX. Will this “unfinished business” mean markets drop more than expected, but then rebound and make new highs by year end? We’ll take it one day at a time.
The VIX’s 2-hour chart shows the VIX crossing over the HMA, which sometimes precedes a VIX spike.
The upper Keltner channel on the 2-hour chart is just below 22, and the Keltners are declining, an appearance that may lend toward a lower high for the VIX.
We don’t have all of the answers, but we can share what we’re watching, and we’ll incorporate 0 DTE GEX into our analysis as well as we enter tomorrow’s cash session.
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