QQQ had a fantastic intraday reversal, with MSFT pulling back some 35 points after a massive gap up. Indices are now far enough below the Hull Moving Average to increase the odds of a pullback across the board, especially combined with a deeper negative move in terms of net GEX. What are some parameters we can watch on the upside and downside that might clue us in to continuation in either direction?

QQQ had a fantastic intraday reversal, with MSFT pulling back some 35 points after a massive gap up. Indices are now far enough below the Hull Moving Average to increase the odds of a pullback across the board, especially combined with a deeper negative move in terms of net GEX. What are some parameters we can watch on the upside and downside that might clue us in to continuation in either direction?

We saw the spike to VIX 17 we were waiting for, but what happens next?

The uptrend (so far) remains intact, with narrow daily candles and a 6401 high for SPX today. With earnings reports accelerating this week, and FOMC Wednesday, let’s take a look at the calendar and sprinkle a little GEX into our discussion to get a better idea of what we might look for this week.

While price has continued pushing toward what seem to be extremes, GEX has remained relatively flat overall for several days, and well off highs of July 3/4. With the VIX below 15 and index upside seemingly limited to 1-2%, we continue to remain cautious while recognizing the difficulty of the exact timing of a turn lower.

Indices continue pressing toward higher targets in choppy fashion, though the weakness under the surface can’t be ignored. Rotation continues to enable maintaining the status quo, but with initial earnings reports seeing mixed reception, what are we seeing as we look ahead? Let’s take a look at the charts+GEX.

The first big earnings reports are out after hours today, with TSLA and GOOG facing mixed reception. Futures are like the honey badger- they don’t care, they’re moving higher. IWM also made a decisive gap above the Hull today, appearing to be headed toward 230 imminently. Let’s take a look at possible reversal areas as QQQ enters short-term nosebleed territory.

The flip-flop continues, this time with QQQ ending the day red while IWM was green. They shared one commonality today: Lower highs and lower lows compared to yesterday. QQQ also entered negative GEX territory for the first time in quite awhile. Let’s take a closer look at the current picture.

IWM is negatively diverging from the S&P and Nasdaq again, possibly forewarning of a quick pullback before resuming more upside. The strong upward momentum makes any bet on downside seemingly risky, but the setup is present for some downside. If IWM sees more downside, will SPX and QQQ follow? Let’s take a look at the GEX picture.

As we begin a new OpEx cycle into the August OpEx, we look at the current GEX setup and technical levels as well for the indices and the VIX. SPX in particular shows interesting intersectionality with its weekly versus daily pictures.

We’re approaching the end of OpEx week in July, and markets seem resilient, ignoring potential risks in favor of making new highs. The VIX has not made a new low despite the rally, and we very well could end up seeing a short-term top imminently as indices reach potential objectives. The GEX picture is still positive, yet GEX across the board is well off of its 4th of July fireworks highs. What’s next?

Typical choppy OpEx price action continues, even as we completed the monthly VIX options expiration this morning. We have enough room overhead to see a nice rally into the Hull Moving Average again, yet the VIX is also still holding the rising Hull, a conflicting picture. What does GEX say as we approach the back half of OpEx week?

IWM seems to have validated the beginning of a pullback, and the VIX Hull is curling upward. What lies ahead? Let’s take a look at what GEX+charts indicate as the most likely path forward, in our opinion.

Markets rebounded slightly after a gap down open, continuing the overall sideways consolidation we’ve seen over the last few days. We do believe we are nearing a decision point for indices, with a break higher or lower becoming more likely. Will this occur before VIX expiration or before OpEx, or beyond this week? With CPI premarket tomorrow, and PPI Wednesday, we have plenty of opportunities for volatility ahead.

We finally see IWM closing below the Hull, an “accomplishment” not seen since June 20. IWM was the last index that lacked a daily close below the Hull, and GEX has also shifted more negative across the board. SPX saw virtually no change for the entire week, following SPX and QQQ already closing below the Hull. With VIX expiration Wednesday and monthly OpEx Friday, risk in both directions exists, but we may see a more interesting week than we’ve seen in recent past, so let’s take a closer look.

Indices continue a slight game of musical chairs, with SPX technically printing a new high today (by 6 points over the July 3 high) while QQQ printed a lower high and a lower low compared to yesterday. IWM finally hit 225 as well, exceeding the target to reach 226 before fading back below the upper Keltner. We continue to look for a near-term pullback, and signs are mounting that it may be close.

Our recognition of a possible attempt back up by indices proved correct today, with the VIX has quickly plunged toward an extreme lower target, almost reaching the 4-hour Keltner bottom at 15.76 before rebounding back to almost 16. With indices stretching even higher toward their respective upper Dealer Cluster zones and beyond the upper limit of the Keltner channels, we are likely still on the doorstep of a larger pullback.

QQQ and SPX remain below the Hull Moving Average, though IWM closed above the Hull today, and the VIX looks like it could go either way..So we are at a point of uncertainty. We also have positive GEX increasing modestly across the board, lending credit to the idea that we may see some choppy ups and downs before a more significant pullback.

We finally saw a break below the daily Hull Moving Average today, complete with a sharp drop in positive GEX across the board. Odds are increasingly shifting toward the beginning of a pullback, though we will entertain scenarios that may involve further upside attempts before any meaningful downside. Let’s take a look at the big picture, including the VIX.

SPX completed the traditionally bullish week of July 4 with a solid rally right into Thursday’s half-day close. Our headline concern on Thursday evening regarding VIX divergences was quickly met with a noticeable VIX spike on Friday while cash markets were closed, and futures continue to fade. While recognizing the inevitable future pullback that we expect to occur in context of a vertical blow-off, we need to exercise patience and discipline as well. Tops and bottoms are not easy, just ask Tulip bulb investor Isaac Newton.