Weekly Review: SPY and QQQ - Market Trends and Analysis
As we delve into the weekly review of SPY and QQQ, several key indicators and trends emerge that can inform our market outlook for the coming week. In this analysis, we'll explore the current state of SPY Deltas, upside potential, and the impact of major events like FOMC, CPI, and PPI. We'll also examine Dealer OI, Gex and Vex profiles, Deltas and price cores, market levels, and gamma analysis.
SPY Deltas and Upside Potential
Currently, SPY Deltas are shrinking slightly, but still on the bearish side, although not quite bullish yet. The price distributions going into Monday suggest a slightly bearish tone, but Tuesday is expected to be quite bullish, followed by mixed signals on Wednesday and bull potential on Thursday and Friday. It's essential to note that large moves can occur when SPY Deltas turn bullish, making it crucial to monitor these developments closely.
Major Events and Market Impact
Next week, major events like FOMC, CPI, and PPI are expected to influence market movements. These events can lead to increased volatility and sudden changes in market trends, making it essential to stay informed and adapt our thesis accordingly.
Dealer OI and Thesis Alignment
Dealer OI is currently in a bullish position for today's expiry, with a pump early in the day that didn't quite close above $430. It's crucial to ensure that our thesis aligns with the current market conditions and Deltas, checking daily to ensure we're on the right track.
Gex and Vex Profile
The Gex and Vex profile changes daily, and it's essential to check it regularly. The current profile shows prices supported at a lower level and at the top, but not supported as much as price rises, especially when the Blue Line gets above zero. This could indicate potential short sides next week.
Deltas and Price Cores
Deltas are showing potential shorts, but the price cores aren't matching up with this. There are bearish positions on multiple days next week, with the largest current Gex levels at 422. This mismatch between Deltas and price cores warrants close attention, as it may signal a shift in market trends.
Market Levels and Gamma
A lot of gamma has disappeared from the actual trading, making it essential to keep an eye on these changes and updates to make informed decisions. The largest current pool is at 422, going into next Friday, with a lot of gamma that cleared up throughout the time.
NG View and Gamma Analysis
The ng view poll today shows a clear ghost zone, indicating some gamma at different spots around the area, but managed to clear up throughout the day. Although some tightness and congestion in gamma remain, much of it disappeared heading down to the 422 range. This is interesting to see, as the current largest pool is 422, going into next Friday, with a lot of gamma that cleared up throughout the time.
QQQ Analysis
The backtest of QQQ shows a fairly okay backtest, with Deltas that shrunk a little bit today, on an uptrend day going into Monday. The analysis suggests a bullish Tuesday, a mixed bag on Wednesday, and a bullish Thursday, followed by a pretty bullish Friday. However, this does not match up with dealer oi (open interest) as much, as most of the positioning is bearish.
Gamma Analysis
The largest gamma level is at 345, which is quite a bit below the current level. This indicates some potential for changes in market trends and positioning next week.
Notes and Market Outlook
Dealer oi can change throughout the day, so it's essential to recheck the data to see how it all works out. The analysis is based on currently available data and may not reflect future market trends.
In terms of QQQ levels, the largest pool of interest going into next Friday's expiry is currently at the 350 price level, with the next largest pool at 360, which was almost reached but not quite. The biggest potential bounce level or support level is at 335, which is a significant distance below the current price. The 340 level is a nearby resistance level.
Comparing SPY to QQQ, the 345 level on SPY is similar to the 340 level on QQQ, with 345 being the largest pull. The 345 level on SPY is where price is supported the most.
QQQ gamma analysis reveals a tight gamma going down, indicating a congested area. The gamma opens up a bit from 350 to 347. Below 325, there is a big ghost zone, which is an area of potential support but not necessarily a guarantee of price action.
Overall, there is a potential for downside next week, but it doesn't necessarily mean a crash or bear market. The market outlook suggests a possible pullback in price, but it's essential to stay informed and adapt to changing market conditions.