6500 Tagged! Now What? August 29 Market Preview
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Tonight’s YouTube video can be viewed by clicking here. We take a look at the markets following NVDAs big earnings release, so give it a look!
Today played out pretty much as anticipated, with QQQ heading higher despite NVDA sitting the day out. AAPL and some other big hitters filled the void. SPX made it beyond 6500 and the VIX almost touched 14.
The VIX daily chart shows an indecision candle, sometimes present when a move reverses, so we need to keep an eye on that. The VIX is also above the 2-hour Hull, a volatility long signal.
Looking at the VIX weekly chart, volume continues to come in at higher strikes, especially 25, yet we see the VIX below the daily and weekly Hull Moving Average. Will the VIX drop into the 12-13 channel we saw earlier in 2024, or will we hold the 2025 lows and reverse higher?
In the event of a mini-spike, VIX 16 may prove to be initial resistance, matching both the weekly 9 SMA and the 2-hour upper Keltner channel. Otherwise, a close above 16.10 begins to look like a trip toward 20 is in order.
Let’s see if we can add further color looking at the indices, starting with SPX:
SPX is above the daily Hull and SPX has entered the upper Dealer Cluster zone at 6500, an area we’ve identified as a target for some time. The upper daily Keltner is close to 6600, which also has decent GEX representation, so keep an eye on that if we surpass and close above the weekly Hull at 6519.
However, the weekly Hull may be where the real challenge is for this move higher. SPX has remained below the weekly Hull going on 5 weeks, so to breach 6519 tomorrow might signal an even stronger move up toward 6600, though this (in my view) would create a more meaningful top, if we go there in a straight line.
The odds favor consolidation around 6500-6520 and possibly a deeper pullback, in my view.
IWM still seems dead set on reaching 240, and we even see some GEX as higher 250.
With the upper Keltner channel just below 241, and the largest GEX cluster at 240, my preferred scenario would be a reversal at 240 (also the November IWM high, so we might find some sellers there) and a deeper pullback that may represent a great buying opportunity for the next leg higher. 220-230 are candidates for support areas, based on both GEX and the Keltner indicator.
We will watch the 0 DTE picture in the morning for clues that we hope will help us navigate the day, and with Monday being closed for Labor Day, we’ll share those observations for free in our General Chat, so we hope you’ll join us in Discord!
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We posted a YouTube video today, as mentioned at the beginning of the newsletter, and we have useful and educational playlists, so give our channel a look if you’re curious about recent market commentary and ideas as well as gamma (GEX) concepts explained.
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