Rare SPX Rally Extension Keeps Going
SPX was red early on, and especially overnight, but the wild and frothy strength in semiconductors seems to have lifted all ships as the day progressed. The VIX hasn’t made a new low though, and indices are walking a technical tightrope, so let’s look more closely. SPX is positive 9 days, which is not common in and of itself.
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SPX Keltners Are Bullish, But Price Is Extended
The candles on SPX’s daily chart have been fairly narrow lately, and the HMA (currently at 7576.89) is rapidly approaching the upper daily Keltner channel. This combination sometimes accompanies consolidations, and the GEX picture certainly backs that notion, with 7600 still representing a large GEX area and the upper Dealer Cluster zone.
Levels: The upper Keltner has now risen to 7641.76, though a loss of 7576 may open the door to 7500 and then 7400.
QQQ: 750 Still Looks Like Resistance
We haven’t seen much change with QQQ, with price action reaching 746, a slightly higher high than yesterday. GEX is still clustered at 740 and 750, with a sharp drop off in positive GEX beyond 750.
Key levels: Bullish trend continues above 739, at least toward 750-760. * A loss of 738 opens the door to 730, then 700.
IWM: Retaking Bullish Potential
IWM closed above 290, our key line-in-the-sand. Today’s gap up and go took IWM back above 290, with 300 appearing to be the ultimate target. Volume continues to be at lower strikes mostly, but maintaining above 290 keeps the momentum positive.
Key levels: Bullish momentum may continue above 290 toward 295-300. * A loss of 290 may open the door to 280 fairly quickly.
The VIX: Holding Key Support
The VIX GEX picture remains centered around the 15-16 strikes, with notable positive GEX growing on a relative basis at each strike between 17 and 25. Activity continues to mostly be focused at higher strikes. The VIX is holding the declining HMA as support at 15.75, previously resistance, and lower timeframes are also showing oversold conditions that often lead to reversals. Furthermore, the VIX Keltners have improved since Friday, flipping to a positive trend instead of negative. Will the VIX reach 17 and reverse lower, or will 20-25 come into play? This is what remains to be seen, so we want to watch what happens when the VIX reached 17 again.
Key levels: Downward momentum may continue to 15.50 *Retaking 16 could see more upside to 17-20.
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