SPX: Pullback Now Or Later? April 24 Stock Market Preview
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Tonight’s YouTube video looks at the latest changes in SPX, IBIT, the VIX, IWM, and AMD, so check it out if you have a few minutes! You can view this video and our library of previous videos by clicking Community at the top of our homepage to find our YouTube channel link.
The market is giving conflicting signals as we continue incrementally pushing higher, with one of the contradictory signals being the VIX, which appears to be bottoming as key indicators shift higher on smaller timeframes.
The VIX spiked intraday toward 22, almost reaching the initial post-20 target we’ve mentioned in recent days on our livestream. Our most recent livestream is always viewable by clicking the Livestream link on our website.
The rejection brought us back toward the 19 level, just above the 9 SMA. The VIX can drop as low as 17 on a daily close and maintain the possibility for a spike toward 25 and beyond, so consideration of the big picture is helpful as indices also dance around upper resistance after a strong upside move.
SPX crossed over to the underside of the HMA 3 days ago, and it has struggled to maintain the uptrend ever since, moving sideways while teasing a very incremental higher high intraday today, but also making a lower low, showing an expansion of volatility and indecision.
The HMA is now very close to 7200, which also marks the upper Dealer Cluster zone, the largest net positive GEX cluster. Thursday saw a bounce off of the 9 SMA, the lower boundary of two indicators between 7051.44-7197.43.
While GEX is skewed positive toward 7400, today’s volume (excluding 0 DTE volume and expiring GEX) was heavily weighted toward lower strikes. We’re still above the upper daily Keltner channel, thanks to the speed of the insane upside move from the bottom of the channel through the top, so odds favor a pullback.
Both indications may end up proving true over different timeframes, which I’ve broken out into 3 possibilities (though not all of the possibilities):
Rally to 7200 (the upper Dealer Cluster and the HMA), then down to 6800-7000 fairly quickly, then up to 7400
immediate drop to 7000, rebound to 7200 by May 1, then consolidation before gradual trend higher through 7400
Immediate drop to 6800, buy with both fists, ride into the sunset at 7400 and call it a year (my favorite one, maybe the least probable?)
Let’s glance at the 3D model to see what has shifted since yesterday. Keep in mind, we were originally watching for a potential tag of 7200 by May 1, then we saw the 3D model indicate a possible early tag of 7200 by Friday, we rallied to almost 7150 today, and now we see a more evenly distributed range of possibilities for tomorrow:
GEX at 7000 and 7045 are larger for tomorrow’s expiry than any positive clusters.
7150 is the largest net positive cluster expiring tomorrow.
7130 is bigger than any near-term GEX cluster and that GEX expires Monday.
Conclusion: If I had to initiate a position prior to a long night’s sleep on Thursday, I’d probably engineer a short trade for Friday. If I enjoy sleep, I might have gone to bed without a position, with plans to react to whatever the GEX picture tells us is most likely for Friday once we’ve poured some coffee prior to Friday’s cash session starting. One set of actions involves more risk, both sets of actions potentially could lead to a positive return.
IWM is also still below the daily rising HMA, and it tested the 9 SMA today, rebounding with a big wick.
Volume is almost exclusively below 280, not a good sign for bulls, though a tag of 280 is still possible.
Lots of activity and meaningful GEX at 260-265 may give some indication of a target for a pullback.
IWM GEX continues trending negative on a daily closing basis, further adding confidence to a near-term pullback. While volatility may remain evelated in terms of intraday moves, my bias is to lean short on any spike higher.
We hope you’ll join us in Discord Friday, where we’ll share some of what we’re seeing on the GEX Dashboard in our general chat.
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