Waiting For Friday?
SPY and QQQ closing above their respective Hull Moving Averages Tuesday for the first time since late September ignited the rally we saw this week, with some back and forth today as the market chooses its next direction. We won’t be posting a video tonight, but we’ll briefly talk through some possibilities here in the newsletter and why we still tilt the odds toward more upside before a potentially nice drop.
First of all, NVDA cooperated with our call for 135 in yesterday’s YouTube video, and 140 is still a possibility. We can see volume today (indicated in light blue) evelated at 140, at least relative to most other strikes on the chart. We do show NVDA to be in a Dealer Cluster Zone, though toward the lower end of the zone, so we shouldn’t be surprised if we do turn down at any moment from this box, even though we are wanting to see somewhat higher prices first.
A rally on the last day of the week has potential to satisfy various targets we’ve been watching and potentially sets us up for a short-term top and a return to the seasonality pattern of a drop toward late October.
NVDA GEX Levels: www.geeksoffinance.com
The S&P left behind a doji or indecision candle today, which doesn’t necessarily imply guaranteed change, since these candles can be continuation candles as well. We still closed slightly higher than today’s open, we hold above the Hull Moving Average, and the Keltners are pointing sharply up, with 5832 the top of the channel.
Despite the mostly positive price action, we actually saw total GEX drop quite a bit for SPX, though maintaining over 1B is still considered bullish. The negative change is still noteworthy.
SPX Historical GEX: www.geeksoffinance.com
In the chart below, you can see a few of our GEX clusters expressed as levels, with the two big upside levels at 5800 and 5850, right around the 5832 top Keltner channel I mentioned earlier. The risk/reward in terms of the upside potential versus downside potential certainly looks lopsided, with around 1-2% upside potential with SPX versus 5-7% downside. Oh well, in a bull market, traders don’t bother themselves with pesky facts when that little 1% higher feels more euphoric.
SPX GEX Clusters: www.geeksoffinance.com
QQQ also put in the work today, and it didn’t even leave the indecision candle, it gave a bullish green candle with a fairly full body. 499 is the top Keltner, giving QQQ about the same potential upside compared to SPX, if Keltners are our guide.
Same story as SPX for QQQ: We’re in a dealer cluster zone where selling may occur, but the zone stretches up to 500, very close to the top Keltner channel.
QQQ GEX Levels: www.geeksoffinance.com
Upside targets for QQQ (based on GEX), also viewed as potential resistance areas and spots to watch price action, include 493, 495 and 500. 441 is the low end of the negative targets, which I bring up because 440-441 have been large GEX area for quite some time this year.
QQQ GEX Clusters: www.geeksoffinance.com
Tomorrow, we have PPI at 8:30 AM (ET) and Consumer Sentiment at 10 AM, two events that may serve as catalysts for the market to make a move. Note that the first one is premarket, similar to CPI today, so we may open with a gap that may impact how we approach trading tomorrow. As usual, we will check 0 DTE GEX (and potentially some Friday expirations on individual stocks that only trade weekly) in the morning to see if any clear targets exist.
We also want to point out that the VIX is now below the Hull, below the middle Keltner, below the 9-day SMA and the 15 EMA (not shown), so all signals seem to point toward the 18-19 target mentioned earlier this week. The sharply ascending Keltner channel has moved up so the bottom line is now 19.72, but an overshoot wouldn’t be surprising. We do have to be cognizant of the (lower) chance that we gap back above the line and see the VIX run to 23+, which is a risk for the bullish market view. Ideally, market shorts can wait near the end of Friday and look toward some cheap “insurance” in the form of a put trade on one of the indices or going long volatility, assuming we are near those upper resistance points. At least that’s what I’ll personally be watching.
We have an interesting week ahead to navigate, and we hope you’ll join us in Discord, where we’ll be alerting our guests and subscribers to any meaningful development we see.
If you’re interested in learning more about our strategy approach, we address all of these topics in our Geek University course which is included in all memberships.
If you’re interested in accessing our tools and analytics, be sure to check out our website!
Thanks for being part of our community and know that we invite your feedback!
We recently posted a YouTube video and we have many short videos for you to review where we cover a variety of predictions and educational topics.
The information provided by Geeks of Finance LLC is for educational purposes only and is not intended to be, nor should be construed as, an offer, recommendation or solicitation to buy or sell any security or instrument or to participate in any transaction or activity. Please view our Investment Adviser Disclaimer and Risk Disclosure.
