Is it SPX’s Turn Yet?
The S&P500 continues to underperform relative to QQQ, and the VIX was positive yet again as divergences continue to grow between volatility and indices. Today’s YouTube video discusses some of these divergences as well as new potential ideas in a variety of tickers on the long side, so give it a look.
We might have a possible target to watch with QQQ, but we have to zoom out to the weekly Keltner channel view instead of the daily Keltners, now that we’re over the top. The weekly chart gives us 544 as a possible upper Keltner channel target. Interestingly, we also saw GEX shift higher, so let’s take a look at that.
QQQ is almost back to the 1B mark, an area that has marked short-term tops recently.
The G1 Dealer Cluster zone now shows 540 to almost 550 as the entirety of the current zone, which fits nicely with a possible 544-545 weekly Keltner target. With FOMC Wednesday right after VIX expiration sees a lot of options go “poof!” premarket, we may have a very interesting OpEx week.
SPX at least attempted to rally, but that pink Hull must be made of a special type of digital ink that acts as a barrier, because SPX couldn’t make it beyond that line. We do still see the Keltners in a bullish configuration, and with SPX unwilling to budge to the downside, this consolidation is starting to look like preparation for one last gasp into the clouds. Bring a parachute if you join for the ride, because the continued trajectory higher in the face of a rising VIX and tech way above what is normally a sustainable technical boundary may make for a slightly wild ride in the near term.
SPX GEX continues along a volatile pathway as well, rising from a neutral 234M to over 1B again. Are major players prepping for the possible rally to 6150? We see bullish reasons think it might. Keep in mind, we’re addressing some negative possible divergences without a specified timeframe to come to fruition, and 6150 is not that far away in percentage terms. So both are possible: We can find an excuse to rally (especially with economic data and the Fed approaching) as well as fade from that point in a bigger way than we’ve seen in at least the past few weeks.
SPX volume at 6150 was on steroids today, and we see GEX clusters at 6100 and up to 6200 that are worth watching. Keep in mind the GEX clusters at 6200 aren’t situated at immediate short term expirations, as mentioned yesterday, though 6200 was previously shown at December 20, so that’s still a curious shift to me.
The VIX is above the Hull and regained the middle Keltner today, so volatility looks bullish as we approach VIX expiration. Maybe not all of those puts at 13 and 14 will make their owners rich?
The economic calendar has a few exciting shows scheduled, ranging from retail and housing data to the 20-year bond auction and the Fed’s rate announcement. Buckle up and keep an eye on how the GEX picture shifts in the next couple of days, you might see some helpful clues.
Econoday.com
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