The Pin Is Over. Now What?
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First off, we’ve been busy behind the scenes de-bugging the recent dashboard rollout (which will be accomplished at any moment), and we’re excited to begin a several week project to bring you gamma (GEX) screeners that can be customized (to an extent) on our website. Even before that, we’ll have much faster GEX Flow data and SPX data, so lots of improvements immediately ahead!
Click here to watch our YouTube video posted today, which includes discussion of the VIX, the S&P and the dealer cluster zone we’re in, and a few trade ideas including META, SMH, DIS, and GILD.
Speaking of the VIX, our video posted Saturday mentioned that the VIX had reached the 2-hour Keltner channel boundary on the upside, so we wouldn’t be surprised by a pullback in volatility of some sort before another spike higher for the VIX. Market moves rarely go exactly according to plan, and the VIX had its own twists and turns this morning, spiking even higher than Friday before fading and closing below the upper Keltner as well as Friday’s close.
I notice that the Keltner channels are sharply pointing higher in bullish fashion, which isn’t a guarantee that we spike immediately higher from here, but even if the pullback continues down to VIX 15-16 range, we can see another spike back to 20+, in my speculative view.
The VIX has spent a few days around this lower dealer cluster area, and we see sizable volume today at strikes ranging from 18-22, so the beginning of Q4 tomorrow may have a few surprises for the complacent.
VIX GEX Levels Chart: www.geeksoffinance.com
GEX did not lead us astray in our expectations for quarter-end for SPX, with 5750 on 9/30 remaining a large GEX cluster for quite some time, still serving as a magnet even today. We do need to see how GEX resets following today’s expiry, and I would not be surprised to see volatility open up a little with the new month and Q4 beginning.
What if I told you the market either gapped down or had a big intraday reversal to the downside every month this year except March? Well, however you answer my question, what I told you is correct. So even with the small sample size of this year, we have good odds to see some volatility tomorrow. Hopefully I didn’t invoke any nasal steam from the bulls’ noses with that factoid.
Looking at the chart below, notice that even today’s recovery for SPX couldn’t get price above the Hull Moving Average. We’ve been stuck below it for 3 days, and 5620 is the next natural target as long as 5774 (and 5790 above that) hold. Keltners are bullish, but a drop to 5620 still fits within that bullish pattern of higher lows.
IWM is also caught below the Hull, and we’ve seen positive GEX decrease at the 230 area, though 225 is still a potential target in an upside move. In this market, it’s hard to say whether or not IWM will buck the trend either to the upside or downside on any given day, so this is something to watch.
IWM continues to be stuck at the zero GEX level, I think it’s either in a coma or trying to bore everyone to death before BAM! making its move right at the beginning of the new month, which is both the dumbest thing ever, and also par for the course. 225 still stands out as a target, as mentioned in the previous paragraph.
IWM GEX Levels: www.geeksoffinance.com
We have plenty of catalysts for some action this week, including various iterations of PMI and ISM on more than one day (here, have another serving of inflation data!), we have a potential HUGE event tomorrow with the Longshoremen (dock workers) strike that may take place tomorrow, impacting goods and services that enter through dozens of ports and potentially impacting inflation. Additional events happen throughout the week that we’ll tackle as we approach their scheduled announcements.
Econoday.com
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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.
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