Tech May Be Down..But Is It Out?
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Markets showed weakness today, but the decline was arrested. Coinciding with the drop was at least some sign of life from the VIX, which briefly spiked back over 15 before returning to a slightly lower price than where it opened. Despite the VIX smash, QQQ was still down. Amazing determination by the volatility sellers to not allow the VIX to catch a break short term. QQQ did stage an impressive rebound from the lows, potentially showing eagerness amongst buyers to disallow holding a break below the key support levels that were violated, at least for now. Will we see more indigestion after a large meal of turkey?
Today’s YouTube video covers some interesting points on SPX, IWM, BTC, ETH, META, and NVDA, which we’ll also discuss in the newsletter right now. Why NVDA? Not only do we get asked about it frequently, but NVDA also has huge implications for SMH as well as QQQ itself, driving much of the overall positive performance we’ve seen.
NVDA is approaching the lower Keltner channel after dropping back to October levels. The candle has my eye, given that it’s potentially a reversal candle. We’ll note that such candles can also be continuation candles, but I think the odds support some sort of rebound soon.
Looking at the chart below, we also see that NVDA is rebounding solidly from the G2 Dealer Cluster Zone, and the persistent GEX at 150 remains. 140-145 are also potential upside targets if NVDA can hold above the 134 area and, at worst, hold above today’s low to signal a potential turn.
NVDA GEX Levels: www.geeksoffinance.com
NVDA’s GEX data graph also supports the notion of a rebound materializing soon. We don’t see meaningful negative GEX below 134, and we have positive overall GEX with higher targets.
NVDA GEX Data Graph: www.geeksoffinance.com
Most of NVDA’s negative GEX is clustered around this Friday the 29th, which is also a half day. The next largest cluster is the 141 GEX on December 6. Based on the chart and the current GEX picture for NVDA, it really seems like we have a good shot at seeing a low by Friday, if not already, with a possible rebound to follow, ultimately targeting 150+.
NVDA 3D GEX: www.geeksoffinance.com
QQQ breached the Hull Moving Average today, dropping all the way to the middle Keltner at 501.81. In Discord today, we made the observation that QQQ might be targeting that 502 when QQQ was still close to 505, so we made good use of intraday data provided to us by looking at the GEX picture combined with the shifting technical picture.
On the positive side, the regaining of the Hull before the day ended showed that QQQ is respecting my indicator settings as well as showing potential eagerness of buyers at that trendline, keeping bears sweating just a little as we enter the holiday.
QQQ GEX swung back to negative, signaling the dramatic shifts in GEX from day-to-day and serving as a cautionary tale of drawing too many conclusions from the daily gyrations in indices dominated by daily speculation. We often look at the individual largest holdings and individual GEX strike expirations to form a better informed opinion of where we might be going next, but I personally avoid going long or short strictly based on where GEX stands compared to the historical highs or lows.
QQQ Historical GEX: www.geeksoffinance.com
Another lean in the bull’ favor is that we are in the G2 Dealer Cluster Zone and we’ve seen a general upward shift in QQQ’s dealer clusters, similar to SPX. This is a bullish development and it has meant essentially that we’ve consolidated at higher levels while still seeing GEX grow at higher strikes.
QQQ GEX Levels: www.geeksoffinance.com
Join us in Discord Friday for our discussions around what’s happening as the day progresses. We’ll be active and posting some updates and we’d love to see you there!
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