Pivotal FOMC, Earnings Ahead
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Before we dive into the indices, note the dearth of important earnings reports this week, also layered atop the FOMC announcement and press conference on Wednesday. Tuesday (tomorrow) appears to be the day of the most meaningful reports possibly impacting multiple sectors outside of tech, while Wendesday after the bell (and after FOMC) will see META and MSFT reporting. Thursday’s after hours reports from AAPL and AMZN will set the tone for the first trading day of August on Friday. This week definitely carries potential for more volatility and/or important shifts than any week in July, at a minimum.
IWM still appears to carry the greatest bullish potential based strictly on GEX and indicators like the Keltner channels, which are rising in bullish fashion, with a range of 230-233 likely on the upside.
Today’s close below the Hull Moving Average opens the door to potentially starting a more significant downward move, though the closing price was too close to the line to draw any definitive conclusions.
A meaningful gap lower tomorrow may open the door toward 210 within a few days, otherwise, 230-233 remain solid upside targets.
A lack of meaningful GEX above 230 raises doubt as to how quickly we will surpass and hold a rally beyond 230.
The odds of a spike toward 230 are still good despite several days of consolidation. A spike toward 230 might mark an important reversal before looking at higher targets again, if IWM rejects a test of the 230 GEX cluster (we see more GEX at 210 than at any price above 230).
230 has shifted to reflect a meaningful cluster this Friday, 8/1, and the largest cluster at 8/15.
Participants appear to suggest IWM has a good shot at 230 sometime in the next two weeks.
SPX is within a tight technical “sandwich” between the upper Keltner at 6412 and the Hull at 6364.
A break below 6364 may signal the beginning of a pullback, otherwise momentum continues to favor the less than 2% overshoot toward 6500.
Our GEX Data Graph shows the positive SPX GEX cluster at 6400 (today’s high was 6401) as key toward hitting 6500 or beginning the pullback immediately, given SPX closing slightly below the 6400 cluster.
Lastly, the 4-hour VIX chart shows the important 14.98 Hull holding, though conflicting with the Keltner channels in terms of which direction is the most likely immediately break.
As long as the VIX is above the 4-hour Hull, I maintain a bias toward higher VIX levels, though a break of the VIX toward the downside may reach 14.50 or less.
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