SPX Maintains A Setup To 7600

Indices experienced a modest pullback Tuesday, with SPX almost retesting 7500 into the close. QQQ closed at lows of the day, also flipping into net negative GEX territory, while IWM did the same (remember what we said about that positive GEX reading on IWM Sunday?). We still see potential for another push toward SPX 7600 by Thursday.

Members save $300 on the annual Portfolio Manager plan with code SUMMERHODL at checkout, which will run through June.

SPX: Watch For A Potential Rebound

In last night’s newsletter, we said SPX was in danger of a short-term pullback. Well, we got a pretty modest one today, with SPX basically retesting 7500. The GEX picture displays a very large net positive GEX cluster at 7600 expiring Thursday, so we still believe SPX has a good chance to rebound toward 7600. I’d like to see any further attempts to the downside stop around the 7470 area to maintain potential for a quick 1.5% move higher to tag 7600. Note that the weekly HMA is now at 7629, which I view as important resistance. I expect rallies to be sold until we see consolidation or a daily close above that line, which would also bring SPX above the big GEX area at 7600.

Key Levels: Bullish over 7500 targeting 7600. Bearish below 7570, ultimately targeting 7400.

QQQ: Looking Weaker Than SPX

QQQ was pretty close to an exact test of the weekly HMA at 745, failing and closing at lows. Net GEX swung to the negative as price closed just below 730, so not a great look. QQQ is the index of stories and emotions, so I give it a little more leeway, and an SPX push toward 7600 will almost certainly drag QQQ with it, though QQQ risks putting in a lower high near 740. Let’s see how it plays out, as there’s not much GEX above 740 for this week’s OpEx. We’re in the middle of a thick GEX area that stretches from 700 up to 740, so the micro action within this zone becomes tough to predict. I think dropping below 720 could see 708 fairly quickly, though holding above 720 maintains potential for a move back to 740.

Key Levels: Bullish above 720 targeting 740. Bearish below 720 targeting 708. Chop zone 720-730.

IWM Nears Important Support

IWM continued lower after the early warning it gave us during Monday’s cash session, now approaching the key 290 GEX area. I also like 290 because it aligns closely with the 9 SMA and HMA, both sitting near 289. As long as IWM holds this level on a daily close, I think the potential exists for a spike to 300 by Thursday. The GEX picture seems to agree, with 300 prominently featured on the 3D graph as a significant cluster for Friday’s expiration. A loss of 290 may target a retest of 280 again.

Key levels: Bullish above 290 targeting 300. Bearish below 288 targeting 285, then 280.

The VIX: One More Push Lower?

Yesterday we said “a tag of 15.75 is certainly possible,” and today we saw an intraday low of 15.77. How about that. We also said we could see a tag of 15, but the odds of sustaining levels below 15 look slim. We still think this is true, though we’ll want to see how the VIX GEX picture shifts beyond tomorrow’s premarket VIX option expiration. We did see some incredible volume at the 65 strike today, with over 400,000 contracts trading hands. I isolated this volume as mostly sitting at the August expiration.

While the HMA is at 15.57, a closer look at the 1-hour, 2-hour, and 4-hour charts reveals a risk of a tag of 15 either tomorrow or Thursday (I lean toward tomorrow).

The 4-hour chart did see a small VIX spike late in the day, but the amazingly weak reaction didn’t allow the indicators to shift enough to turn the VIX picture positive, so the HMA is still buried at the declining lower Keltner channel. The 1-hour and 2-hour charts show the lower Keltner around the same 15 area (or slightly lower), so risk exists for the VIX to test 15 before triggering another oversold bounce. If the VIX continues higher early tomorrow, I am looking for a reaction at 18, which might then reverse back to 15, so we’ll have to see what happens early tomorrow.

Key Levels: Bearish below 16 targeting 15, then consolidation or a rebound. Bullish above 16.30 targeting 17.5-18 in the short term.

Join The discussion

Tonight’s YouTube video covers SPX, QQQ, MRVL, MU, and IBM, so give it a look if you have a few minutes! This video and our prior videos can be viewed 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.