QQQ And SPX: Rebound Or More Downside?
SPX and QQQ incurred damage to the short-term most bullish picture with today’s gap down, failing to hold the intraday rebound attempt. While the larger uptrend remains intact, downside risk still exists this week in the form of large negative GEX clusters at lower strikes.
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SPX: confluence With GEX AND 50 EMA
Starting with the net GEX picture on the daily chart, SPX has a thick cluster of moving averages overhead between the 7435-7350 area. We also see some positive and negative GEX at 7350, though the larger zones are 7400 and 7500. Any rally to that 7435-7450 zone may encounter a possible reaction to the downside, while breaking through it may quickly reach 7500. On the downside, 7315 is the 50 ema on the daily chart, which may be an important target this week. On a net GEX basis, notice the shift lower, with 7000 now appearing to be a possibility with better odds than it had yesterday (still not high odds at the moment, from our view).
SPX Weekly Picture Shows Danger
If SPX loses 7315, the weekly picture shows 7244 as the next stop, and 7000 starts to look like a higher odds event if we lose 7244. We will take it one level at a time, also being open-minded to a whipsaw back up if overhead resistance is recaptured. SPX recapturing 7419 (the weekly 9 SMA) is necessary to consider the previously discussed 7435-7450 range or anything higher.
SPX net GEX dropped to a level within 6 MM of QQQ’s net GEX today, which is nothing more than an interesting coincidence I don’t see often. The more important factor is that this reading is negative, but it leaves a lot of room to become more negative, not reaching a GEX extreme until we see -2.5B or greater to the negative.
SPX Weekly GEX Suggests 7320 Soon
A look at the 3D model reveals 7320 as the largest net GEX cluster expiring this week, with the largest cluster on Thursday, June 25. If the displayed GEX doesn’t change tomorrow, we may be in store for a deeper move to the downside, and it may in fact be tomorrow or Thursday, we’ll see how it plays out. QQQ has something to say about this, which we’ll discuss next.
Key Levels: Bullish above 7419 targeting 7435-7450, then 7500. Bearish below 7400 targeting 7320 initially.
QQQ: Holding Up Better, Still At Risk
QQQ closed much closer to its weekly 9 SMA today, a more bullish close than we see with SPX. Technically, QQQ is below the 714.49 9 SMA level, so the relative comparison may not be significant in this case. Net GEX shows the significance of the 700 strike, and we have the daily 50 EMA at 697, so 700 may end up producing a more solid bounce. Below 697 and we may see the weekly 15 EMA at 686. Looking higher, 724-727 is a thick cluster of moving average resistance points, so bulls want to retake that area quickly to target 740-750 again.
Key Levels: bearish below 724 targeting 700. Bullish above 724 targeting 727-730, then 740.
Let’s look at QQQ’s 3D model: while SPX shows 7320 as the largest net cluster expiring Thursday, QQQ shows 700 as a big GEX cluster expiring tomorrow. Does this imply SPX hits that lower target a day early? It’s entirely possible, as GEX targets aren’t exactly timed every time to occur on the expiration date. Futures are higher at the moment, so perhaps we will first see how upside resistance is handled. We hope you’ll join us in discord tomorrow to continue the discussion!
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