Temp Cease Fire: Fakeout Or Breakout? April 8 Stock Market Preview
Get $300 off of the annual Portfolio Manager subscription by entering code EASTER26 at checkout! This will only last a few more days.
Tonight’s YouTube video takes a look at today’s developments with SPX, the VIX, BTC, AAOI, MU, and more, so check it out if you have a few minutes! You can view today’s video and our library of previous videos by clicking Community at the top of our homepage to find our YouTube channel link.
Yesterday we discussed the risk of a pullback for indices to SPX 6465-6550, potentially accompanied by a VIX spike up to the 29-30 level. While we didn’t exactly hit 29 (todays VIX high was 28), I think we can call that a win, and as we’re seeing after hours, the bullish scenario we laid out has begun, with that lower high serving as resistance as the market popped.
I’ll add a view of a possible nuanced pathway to complement what was said in the YouTube video: Yes, the large after hours move on news of a temporary (or longer) cease fire in Iran is a bullish development that may imply the VIX can reach 20 before long. But let’s discuss some reasons why I think we may first see yet another countertrend bounce in the VIX from the 22-23 area:
First off, the chart below shows the near touch of the weekly HMA today and a rejection. We see positive GEX down to 22, at least as of the close today, though this will likely change in the morning.
The daily chart (not shown) indicates the 50 EMA at VIX 23. Theoretically, we could see an overshoot toward 22, then a move back over 23 to retest 25 again, then the move toward 20. I know, what’s the point, if we’re headed to 20, strap in and put on your goggles, but some of us like to trade the bounces in between.
A quick look at the VIX 2-hour chart shows the lower Keltner channel at 21.38, not far from the 22 area where I think we can bounce. The close today just below the 2-hour HMA technically signaled a VIX short by my methodology, so we’ll see if the gap down for the VIX early in the morning can reveal more about where we might see the VIX turn back up.
IWM has certainly looked more bullish than almost anything else I’ve been watching and today saw a close higher than yesterday’s close with a bounce from the HMA/9 SMA confluence.
After hours shows IWM at 261, just ahead of the large GEX cluster we see at 260.
This move is very stretched above the daily HMA, and if you were to look at the 4-hour chart, you would see that IWM stopped right at the top of the 4-hour Keltner channel.
The 4-hour Keltner has served as a pretty good guide for IWM, with overshoots and undershoots sometimes occurring (with my settings applied), but only for short periods of time.
I think IWM has a good chance of continuing onward to 270, perhaps by the end of OpEx week, but I would expect a near-immediate pullback from the general 260 area as a more likely initial scenario.
QQQ’s after-hours action places it at roughly 606, only 4 points away from the upper Dealer Cluster zone.
We can make some similar observations: QQQ is at the top of the 4-hour Keltner, and it’s quite stretched above the daily HMA.
I would like to buy a pullback toward 595, if we can get one.
SPX made an intraday low at 6534.55, well within the range that we were looking for in our discussion yesterday.
ES futures are up a whopping 160 points, which would place SPX in the 6750-6770 range, just above the 50 EMA on the daily chart at 6708.
Looking at the daily and weekly charts, I’d like to see SPX come back to 6660-6700 before continuing beyond 6800, so we’ll see what happens with tomorrow’s open.
Looking at the 3D graph as of the 4pm cash session close, it’s interesting that SPX’s largest net GEX clusters expiring tomorrow are at 6720 and 6730, over 100 points higher than the closing price. Let’s see if those targets become relevant tomorrow.
GEX will almost certainly shift with the large move that occurred after hours, so we’ll likely take profits on our “bargain bin” long trades from the last few days while being patient for the GEX picture to point us in the next most likely direction.
We appreciate your involvement and we look forward to seeing you in our Discord community, where we share and converse every day during trading hours!
To enter Discord as a non-subscriber, go to our homepage and click on Community to enter our Discord server! First-time guests receive a free 7-day trial of the premium Discord channels and this is where we discuss what’s happening in real-time. Thanks for reading!
We conduct a livestream that is accessible from our homepage every day around 10:30am ET, so feel free to join us there. You can also listen to our most recent livestream any time before the next day’s livestream occurs.
Get a big $300 discount for the annual Portfolio Manager subscription by entering EASTER26 at checkout!
Thanks for being part of our community and know that we invite and appreciate your feedback!
The information provided by Geeks of Finance LLC is for educational purposes only and is not intended to be, nor should be construed as, an offer, recommendation or solicitation to buy or sell any security or instrument or to participate in any transaction or activity. Please view our Investment Adviser Disclaimer and Risk Disclosure.
