VIX Expiration & FOMC: March 18 Stock Market Preview
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Heading into VIX expiration premarket and FOMC tomorrow, we see the VIX within range of where we closed today, with GEX indicating a likelihood of pinning somewhere between 20-23.
With few exceptions, FOMC days going back to early Summer 2025 have been characterized by muted movement the day of the announcement, followed by a gap down the following day. The Thursday-Friday after FOMC has been brutal in some of those cases, with only one (September 2025) seeing a modest 3-day rally afterward. Will this time be different? It’s possible, but we can keep the recent track record in mind as well.
The VIX gapped down again today, which on the surface looks encouraging for market bulls. The biggest potential problem is the current positive GEX structure for the VIX (which may change as soon as tomorrow) and the current zone between VIX 20-22 representing the last stop along the rising trendline we’ve followed since late 2025. It’s possible that a decisive breakdown below VIX 20 or an additional spike from this area can occur by the end of the week, so stay on your toes!
IWM closed above the declining HMA, but failed to get past the 9 SMA, so the picture hasn’t dramatically changed just yet. We still see GEX at lower strikes as well as daily volume, so we’ll watch for the risk of more selling below 247, or a better look for bulls if IWM can close above 254.
In the event of more selling, the GEX intensity gauge is near enough to an extreme already that we may finally see an extreme reached as we approach the 240 strike, which may end up being a good contrarian long opportunity, in my view. At that time, I’ll want to look at other possible confirming signals from the VIX as well.
SPX is now above the HMA, an improvement from yesterday, but the cash session mostly saw selling from the important declining 9 SMA. Excluding volume and GEX from today’s expiration on my chart, you can see the relative significance of volume at 6000, 6700-6800, and the 7000 strike.
Positive net GEX at 7000 also appears significant, representing a potential upside target (again) if SPX can show continued improvement.
The initial headwinds continue to be negative total net GEX, the declining trend of price and indicators looking back beyond the last two days, and only a narrow set of indicators showing oversold conditions.
QQQ has subtly shown more improvement, with price failing to make new lows as well as closing near the important 604-605 zone, and volume also mostly at higher strikes today.
QQQ still has a GEX problem- most of the largest net GEX strikes at at lower prices, and the Keltner channels do not look bullish to me, so any rally may be short-lived. It wouldn’t surprise me to see a whipsaw move heading into FOMC, or perhaps heading into Thursday, based on the larger moves we’ve seen on Thursday following FOMC in many recent cases.
Today’s 3D graph is looking very similar to yesterday: Very large GEX clusters at 590 and 600 expiring Friday. GEX seems to imply that we still have a decent chance of seeing lower prices, even if temporarily.
QQQ 600 has been an important area going back to early February, and mid-March has brought 590 into focus, with multiple tests of 591+ occurring. Will we break below 590, or have we seen sufficient tests of 590-600 to consider the decline “over?” The lower Keltner channel is closer to 565, though GEX drops off significantly below 580, so we are left with uncertainty heading into tomorrow.
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