SPX Inflection Point Near: April 2 Stock Market Preview
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Tonight’s YouTube video looks at SPX, QQQ, the VIX, AMD, APP, and more, 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.
SPX is approximately 155 points away from the HMA, which is quite extended compared to past deviation from the HMA. While such extensions occur, we often see mean reversion back to the line from such extensions.
Given that the overall moving averages and Keltner channels are still pointing lower, I believe the burden is on the bulls to continue generating contrarian price action to the upside.
Given that futures are already heading lower, I view a bullish resolution being a higher low, potentially around the 6400-6500 zone, then continuation higher.
The alternative is another test of the lower Keltner channel, which we’ve seen twice in the last week: Third times a charm? This tag would take us to the 6250 area, and we certainly see meaningful GEX at every century strike down to 6200.
QQQ is also relatively extended above the HMA, and we see a similar droopy picture when analyzing the moving averages and Keltners.
A tag of the lower channel matches quite well with the 550 area, though a more bullish scenario exists where QQQ reverses higher from the 560-570 lower Dealer Cluster zone, establishing a higher low.
The VIX is once again threatening to close below the weekly HMA for the first time since the week ending January 4- will this week be “the one?” A VIX rally back to 28 maintains potential for continuation higher along the steep trendline.
The Keltners have certainly continued higher, reflecting 43.43 as the top channel, and we do see GEX (albeit diminishing GEX) up to the 50 strike. Volume was also elevated today at those higher strikes.
We have definitely seen a more negative shift in net GEX for the VIX recently, with 20 now showing meaningful negative GEX, so a bullish scenario might see the VIX reject from the 28-30 area and continue lower toward 20. Given the dive in futures, we may find out soon whether or not we will see another leg down for indices.
Another indicator I’m watching is VVIX, which found support at the 50 EMA, just as it has this entire rally in volatility. While a natural spot to see a bounce for volatility, the area also highlights the significance of a break lower below the 50 EMA, so we are aware that more than one possibility exists from this area.
We have some bullish contrarian signals in the overall sentiment, yet a final low could end up happening at a lower area, and quickly. So we will be patient and watchful in coming days with knowledge that there is plenty of money to be made without nailing the exact bottom (or top). We hope you’ll join us in Discord for discussion around real-time observations tomorrow!
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