Pullback Into Early August?
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Today’s YouTube video can be viewed by clicking here. Check it out if you have a few minutes! We take a look at major indices as well as AAPL and more.
After hours Wednesday, QQQ was in party mode, but IWM wasn’t buying it, actually dropping a little.
Seems like IWM may once again be giving a little advance notice that a pullback is just ahead, and we saw others follow this afternoon to the downside.
Momentum is currently lower, and volume was higher at 209-211 than at any other strikes.
IWM’s Keltners are still pretty bullish overall, with a slight downward tilt just recently, but the upper channel is almost to 234.
IWM’s net GEX reading has taken such a fast negative turn that it’s not far from an extreme when compared to IWM GEX over the last 52 weeks, according to our GEX Intensity Gauge.
The contrarian value in the GEX Intensity Gauge is that we sometimes see meaningful reversals when GEX reaches the extreme, and IWM in particular seems to be more contrarian in general when it comes to GEX readings, especially compared to SPX.
If IWM GEX continues to drop, we may actually see a hastened bounce back up, even if the trend remains lower beyond a “dead cat bounce.”
With meaningful GEX still residing at 230 for August 15, there’s a chance IWM finds a low in coming days and then stages a quick rebound, so we have to be watchful as price extends below the Hull Moving Average and as GEX plunges into deeper negative territory.
QQQ’s spectacular reversal accompanied a 30+ point drop for MSFT from the stratospheric gap up we saw today.
We’ve been highlighting the large positive GEX at 570-580, but we’ve also been pointing out an almost complete lack of positive GEX above 580, at least not in notable quantity.
560 appears to be key in pointing toward an immediate bounce or a deeper dive toward perhaps 540, which is also pretty close to the lower Keltner channel.
SPX is also looking negative, dropping below the Hull and closing fairly far below it. Today’s close brings 6392 into focus as important overhead resistance, and 6100 might be a possible downside target, though we’ve been seeing volume at 6000 as well.
6500 remains as meaningful GEX relative to other positive strikes, but SPX needs to overcome 6392 to even have a shot at making that move in the near term.
SPX still shows positive GEX, though in neutral territory, so we are still looking at this pullback as a buy-the-dip opportunity.
We will watch IWM for possible early signs that this pullback is over, but it is likely still too early at this stage.
We have a growing watchlist of long opportunities we may enter when it looks like the next leg higher is starting, and as usual, we’ll be alerting what we’re seeing in Discord, so we hope you’ll join us!
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