Daily Preview: Thursday, July 11
Wednesday, July 10 Review:
What a day, the markets are defying gravity amazingly well as they make new highs. In our free Discord channel, at 10:05 ET we posted the following chart, explaining that 5600 was a big gamma (GEX) cluster and that overall 0 DTE GEX looked positive. Notice the lack of meaningful negative strikes and the various positive strikes with more GEX? That’s a pretty solid indicator of an upward bias. We suggested that the odds were high to approach 5600 SPX, but then we would wait to see if GEX grew at 5630 (which had already been seeing increased interest) or another strike over 5600 before shifting our expectation today. All of those early signs were correct, and SPX put in a very positive day.
If we look at the SPX chart, we can see various times since November where SPX exceeded the upper Keltner channel by about 40 points, though sometimes a bit more. One case saw SPX rise closer to 60 points over the upper boundary, an impressive move. We are now about 40 points over the upper Keltner, which (according to the past) has led to the occasional sharp drop or at least some consolidation at a minimum.
SPX GEX popped right back up, almost reaching its high point from a few days ago.
The total GEX Picture is back to the extreme positive territory, so we need to be on the lookout for a reversal, or some consolidation to allow the GEX Intensity Gauge to reset to a lower level, even if it stays positive.
The VIX is starting to rise with the market, and same for VVIX. This could be a precursor of a reversal, but keep in mind that the VIX can also rise with the market for a period of time before markets actually correct.
What are we Looking For On Thursday, July 11?
Jobless claims and especially CPI will dominate the narrative tomorrow morning, followed by perhaps a chance for brief additional volatility surrounding the 30-year bond auction at 1 PM ET. We seem to be in some sort of extended blow-off top, depending on the timeframe you’re looking at, so even the VIX rising with the market doesn’t mean immediately go short. It doesn’t mean stay long, either..But we plan to be cautious and look for intraday extremes in order to take profits or establish new positions. We’ll share what we’re seeing at the cash market open and as the morning progresses, so tune in with us!
Stay with us in Discord as we get the CPI number to contend with, and look for any opportunities that may pop up. We have some very skilled subscribers also sharing their trades as they incorporate GEX..It’s been fun! Thanks for reading!
