SPX Rebound Efforts Rejected: Now What?

Early strength from IWM ended up with harsh rejection at key daily resistance, accompanied by a very strong move up to 109 by VVIX and a VIX close above 22. This type of action is not necessarily what we would expect at a pivotal turn back up, though we also can’t rule out another rally attempt, especially with PPI and a variety of known and unknown risk factors tomorrow. Will the VIX reach 25 next, or another retest of 20 below?

IWM: Still Outperforming, But Not Yet Ready To Resume

IWM was looking very encouraging early on, potentially signaling that indices were ready to resolve higher, but the intraday high at exactly 289 marked a failed look above at the 9 SMA and HMA juncture. The rejection took IWM back to a closing price at 282.02. On one hand, IWM still hasn’t broken either side of the range from Tuesday. IWM also holds above the key 280 level. On the other hand, the failure above doesn’t build confidence that resolution this week will be higher, so Thursday we want to watch how IWM handles the 280 zone, if we don’t immediately begin to rebound.

Key Levels: Chop zone between 285-290. Bullish to 300 above 290. Bearish below 280, targeting 270-275 initially.

VIX: Maintaining A Bullish Volatility Picture

The VIX back-and-forth action has still been within the context of an ascending bullish pattern on various timeframes, with the 1-hour chart seemingly heading toward a 25 target as the Keltner channels rise to the right. A loss of VIX 19.66 begins to jeopardize the bullish view of volatility.

Key Levels: Bullish over 20 targeting the 25 strike, bearish below 20 targeting 17.5-18.

In addition to the levels mentioned above, the GEX picture agrees with my interpretation of the chart, which doesn’t mean I’m right, but at least I’m consistent. Positive GEX between 21-25 suggests 25 as a good target for the VIX if it continues pushing from today’s close over 22. The negative cluster at 20 appears to be a possible pivot area, and GEX really starts to diminish in size below the 18 strike.

QQQ Looks Like A Sell Between 733-750

QQQ is testing the 9 SMA (technically below it now) around 695, and selling momentum may next target a low lower that this week’s current low at 686.37. Any rebound may meet resistance at 733, and the weekly Keltner at 750 may be strong resistance, especially with the HMA almost at the upper Keltner boundary. While semis have remained elevated despite pullbacks, the Magnificent Seven stocks mostly appear to be in trouble from a chart standpoint.

Key Levels: Bullish above the GEX area at 715, potentially targeting 733-740 initially. Bearish below 700, retesting lows at 686 or possibly dropping toward 750-660 beyond that.

SPX: Another Bounce Attempt, Or Straight To 7000?

SPX reversed to the downside today, not yet retesting yesterday’s low, and closing at the 50 EMA. GEX data suggests we might rebound tomorrow toward 7335,and ultimately, a test of the HMA at 7472.70 would be interesting to evaluate in terms of possibly opening a new short or preparing to buy the break above 7500 on a closing basis. Further downside from here may be targeting 7000 for what we think could be a great dip to buy.

Key Levels: Overhead resistance at the 7400 GEX level, a close above may lead to 7472, 7500. Bearish below 7300 targeting 7000.

7325 and 7335 are the two largest GEX clusters expiring Thursday for SPX. 7355 was the largest cluster expiring Wednesday, as discussed Tuesday, and we certainly did see some action around that area before moving below 7300. So I pay attention to the largest visible clusters with the understanding that we may not necessarily close at that level, even if we test the area at some point intraday. The bottom line is that GEX suggests we might see a rebound tomorrow, even if such a rebound doesn’t lead SPX out of the woods completely.

Join The discussion

Today’s YouTube video discusses SPX, the VIX, AMD, MU, MRVL, CVX, HOOD, and PANW, so we cover a lot of ground! Check this out as well as our prior videos by clicking Community at the top of our homepage to find our YouTube channel link!

Non-subscribers can join through Community on our homepage. First-time guests get a free 7-day trial of the premium Discord channels, where we talk through what is happening in real time.

We run a livestream from the homepage every day around 10:30am ET, and you can replay the most recent one any time before the next.

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.