QQQ’s Uptrend Meets Weekly Resistance
The VIX weekly picture is quietly turning a corner to the upside as the daily chart tests the only resistance holding off a test of the VIX 20 area. QQQ is once again at weekly HMA and upper keltner resistance as GEX dips slightly negative. The uptrend is strong, but thanks strictly to the semiconductors. A pullback may be imminent, but the odds still favor this pullback in the context of a larger uptrend.
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QQQ Struggles At Weekly Resistance
QQQ has been tracking higher just below the HMA for the last 2 weeks following the red weekly candle that took QQQ back below the HMA initially. The momentum of the uptrend has allowed QQQ to maintain levels just below the high from 3 weeks ago, but notice most progress was made on the weekly gap up last week, not during the cash session. I’ve highlighted past instances where the HMA meeting the upper Keltner channel with price crossing below both lines as a consistent marker of consolidation periods, though this by no means infers the end of the uptrend, only that it may be time for a breather.
Make Or Break For GEX At 720
We highlighted GEX clusters expiring this week that were prominent (and therefore potential magnets for price) since last Friday’s newsletter, and now it’s time to find out if those clusters are still in play. This includes 7335-7345 for SPX and 720 for QQQ. While futures are red as I’m typing this, nothing is certain, though it’s appearing to at least give 720 a chance as we look to Tuesday’s cash session. We’ll be able to further improve our odds as we see the 0 DTE picture tomorrow morning. Note the weakness in the Mag 7 names: the future will show whether this weakness was a warning sign or a buying opportunity. If the latter, perhaps there’s rotation from semis toward mag 7? More on this idea later this week.
Key Levels: bullish for a test of 750-753 resistance above 740. Bearish below 740 targeting 720, a possible dip buy area.
SPX: Struggling To Retake 7500
Today’s option volume was heavy at the extremes of the indicated GEX range looking forward: heavy volume at 7000 and 8000. In this context, indices are chopping around the middle, trying to decide the next larger move. While it’s entirely possible we see a retest of 7600, we still view near-term upside as likely capped by the 7600 GEX area (I could make an argument for a temporary spike and failure near 7630 though). Bringing this view to what might happen over the next couple of days, we may see weakness tomorrow, with the weekly 9 SMA at 7431 in focus as a “must hold” spot technically. SPX net GEX shifted somewhat since last Thursday: GEX at 7450 appears to be the largest net cluster expiring tomorrow, but then we are looking at a big cluster at 7320 expiring Thursday. 7600 is almost equal in size for late this week, so we really want to see if SPX loses 7400 or retakes 7500 for an improvement of our odds toward either of those larger clusters.
Key levels: Bullish over 7500 targeting 7600. Bearish to 7320 below 7400.
SPX And QQQ Flirt With Negative GEX
SPX and QQQ are either in or extremely close to negative GEX territory, which can easily change with one day in this market, but it’s a trend worth watching. I think the persistent recent GEX drop highlights increasing odds of at least some consolidation or a modest pullback from this area.
The VIX Has A Setup To 20
VVIX was up 3 points today, and the VIX is just below the key 17.60 area I’m watching as a line in the sand that could trigger a move to test the 20 strike. A more bearish spike could take the VIX to 25. The weekly HMA is curling upward and the positive setup exists on various timeframes. As of now, the VIX GEX picture isn’t supportive of a sharper spike, but the VIX can change quickly once weakness ensues, so the possibility of a larger shift at least warrants watching. The most bearish scenario is not a high odds outcome in our view at this time.
Key Levels: Likely limited downside below 15. Bullish above 17.60 targeting 20, then 22, then 25.
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