Mid-Month High Or Low?
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Well, we had temporary hope of some sort of break out of this range with this morning’s gap down, only to yet again see the attempt thwarted with buying. Over 3 weeks of no movement on a net basis, which seems like a long time because we haven’t seen this sort of consolidation really since 2023. Even the April-May consolidation in 2024 was easier to handle because we had a distinct trend change lower, then back up again. So we won’t belabor points already made, the bottom line is that we see neutral gamma exposure (GEX) and an undecided market. We discuss SPX, QQQ, and several individual ideas in today’s YouTube video, which you can view by clicking here. In the newsletter, we’ll make a couple of observations pertaining to mid-month cycles we can observe in the recent past.
I only went back to August, though we could have looked back much farther and we would see a similar tendency in most months. That is, we often see mid-month highs or lows. With February showing mostly sideways movement so far, will we see one big day up or down to mark an important pivot, or will this month be an exception to what we’ve seen recently? I see today’s rally held below the Hull moving average, which is a mark in favor of the bears, in my view.
I circled the dates that were within 1-2 days on either side of the middle of the month to make it obvious that important highs or lows were made around that timeframe. As we approach Friday the 14th, we may see some sort of shift between Friday and Monday, if this tendency holds true.
SPX GEX isn’t giving us much to chew, we see fairly positive GEX with the largest clusters in positive territory, yet 320M is still actually within our neutral range.
The GEX Levels chart below shows the 6200-6300 upper Dealer Cluster that we’ve been watching for over a week at that level, but I do notice the lower Dealer Cluster has shifted a little higher, implying dealers may become buyers with an even more shallow decline than the previous 5700-5800 indicated zone we’ve seen in previous days.
We see a similar pattern with QQQ, important mid-month highs and lows have happened every month since October. For QQQ, August and September saw larger shifts closer to the beginning of the month, but going back to mid-Summer (July) showed a similar pattern. QQQ happened to close above the Hull, in contrast to SPX. Which will prove correct?
At this point, we will be actively trading on a 0 DTE basis when the GEX picture presents what we feel are clear targets intraday, awaiting more clarity regarding the near-term pathway beyond the same day. We still see late March as a key timeframe to approach 6200 SPX, but we’ll have to monitor shifts in GEX along the way for confirmation. Thanks for reading and thanks for those of you who contribute to our discussion in Discord!
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