SPX On The Brink: March 27 Stock Market Preview
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Tonight’s YouTube video spends a short time reviewing the latest moves in SPX, QQQ, IWM, GLD, AAPL, and GOOGL, so check it out! You can view the most recent and prior YouTube videos by clicking Community at the top of our homepage to find our YouTube channel link.
We saw SPX and QQQ reach targets we noted on Monday and Tuesday this week: 575 QQQ, 6475 SPX. While SPX’s 6475 GEX was very prominent on 3/31, the general timing fits right where we would expect such a possibility to be fulfilled, so we thank GEX for the advanced warning.
Since we’ve reached those targets, does that imply the downside is over for now? Not so fast- the VIX still looks strong, holding above key moving averages, and various timeframes appear to suggest potential for more upside.
Indices are approaching their respective lower Keltner channels and large negative GEX clusters (in most cases), so my general view is that we could see a short-term push lower, but that extended drop may see a rebound very soon thereafter. Let’s see if we can make a Friday low, to have some speculative fun looking ahead.
IWM’s chart looks more bullish than SPX or QQQ, in my opinion, with key moving averages curling upward on the daily chart as overall price action has resulted in higher lows and higher highs since last week’s low.
Today did see what might be the beginning of a pullback for IWM, which we’ve been expecting, and I really want to see 245 hold for immediate continuation higher.
I don’t see a breach of 245 as the end of the world for bulls, because not much farther below we see a big negative GEX cluster and the lower Keltner channel in the 237-240 range, which I view as a likely area for a rebound.
Without making any predictions about the next month or two, I still like the risk/reward of buying the next 2-7 points down for a rebound to 255-260.
SPX plunged right into the lower Dealer Cluster zone, also printing a new low relative to Monday’s low. SPX and QQQ are divergent from IWM with a more negative performance recently.
SPX net GEX (excluding 0 DTE GEX, as shown) is certainly negative, but we see GEX begin to drop off below 6300.
Even if the downtrend continues, I wouldn’t be surprised by an intermittent bounce targeting 6600, so I am watchful when we see price stretch away from the HMA by this much.
Let’s zoom out to SPX weekly, also displaying gross GEX instead of net GEX, giving us a view of GEX clusters on the positive and negative side, even if the net of the two together (positive minus negative GEX) is not substantial.
If SPX overshoots the lower Keltner channel on the daily chart- currently at 6454- we might see a fast knife drop to the lower weekly Keltner at 6277. This line is within 23 points of what I consider to be the last large net GEX cluster at 6300, giving us some confluence to watch.
SPX is stretched below the weekly HMA quite far, so just as we see on the daily chart, a risk of a snapback rally to backtest some higher levels (lower highs would be expected initially) would not be surprising, and risk/reward is not as attractive for new shorts, in my view.
I also excluded volume in contracts expiring today from the volume bars to the bar right, showing us sort of a bell curve of volume around 6500 toward 6800 and lower toward 6200, with outliers at 7000 and 6000. We already touched 7000, will 6000 get a turn?
QQQ continues to catch my attention as the weakest looking of the large indices from my view, but paradoxically, we see notable volume at strikes ranging from 600-630, with very little volume below 560.
I would consider the volume tilt as bullish, and we’re approaching the last of the largest negative GEX clusters, with 570 just below.
QQQ 580-590 are still quite large net GEX clusters, and they may represent good initial targets to watch in the event that QQQ can bounce from the next 5-10 points lower.
QQQ’s weekly picture shows 550 as an interesting spot to watch if we lose 570 on a daily close, with 550 matching the lower weekly Keltner channel as well.
We’ve strategically captured some directional longs over the last week in the mining sector as well as tech companies like NFLX, so we hope you’ll join us in Discord where we’ll continue the discussion around opportunities that the market may hand us in coming days.
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