Volatility is here and now as tech will sink and or save us. 9/25/23 Premarket outlook and Technical Analysis for day trading the SPY.

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Good morning traders, we are in the middle of some heavy volatility right now even though it has not gotten to the point I am looking for yet. I am looking for a spike in Vix to get above 20 and maybe even push the 25 level of better on this leg down as it ends. Volatility lags as all the 0 DTE option activity has exploded. But we know we are in heavy volatility territory because the short term VIX futures (/VX:XCBF) is near the same level as the spot VIX or active futures Vix Price (/VX:V23). I have a rule when we are in a volatile downfall; I don’t start looking for the bottom until short term Vix surpasses all other Vix contracts if we are on the leg down and not just a leg down. If we are on a leg down, then pops where short term Vix ties higher term Vix is just a clue but not to be trusted.

Now Tech is playing a major part in the fall, just like it will play a major part in the relief rally. I have already warned about the giant Apple which is currently playing at its major support. But in order for us to really fall there will have to be some new tech blood sacrificed. So, let’s look at who would next to go after. We can do this by just seeing who has the most fat to cut based on a year-to-date basis (who is still profitable or in positive territory) Here is the list: 1) Nvidia is up 180% YTD 2)Meta is up 143% YTD 3)Tesla is up 106% YTD 4) Amazon is up 51% YTD. So, if we push lower it is going to be on the backs of these stocks.

The weekly outlook on the Spy is bullish, closing above 430.42, with possible retracement around 443 area at some point this week. We have harmony between the tech side which is (bullish) and the Quant side which is (bullish). The Futures have a bullish bias on the week closing above the new open with possible retracement around the 4493 area. We have harmony between the tech side which is (bullish) and the Quant side which is (bullish). Buckle up, just because I have a positive outlook on the week doesn’t mean we can’t go hang off the cliff first before turning around or the fact Volatility could snap us to a super explosive alternate thesis. Prepare for some big movement to both the bullish and bearish sides this week as the relief rallies become bigger and more sudden.

Key levels to watch for … Resistance (jack) 430-431* (queen) 432*-433 and (king) 434-435 area. Support (jack) 429-428 (queen)427 and (King)426-422. The main thesis for the day is a BULLISH bias closing above 430.42 with a projected target/high of between 430-434. Alt thesis is BEARISH bias closing below 430.42 with a projected target/low of between 429-422. The main channel we are in, is between 453-425. Last week, market strength and breadth ended the week opening gap up but hanging in a range for most of the day before breaking lower late in the day.  I expect market strength and breadth to open lower and possibly being pinned to lows for a good while.  We have harmony between the technical side which is (bullish) and the Quant side (bullish bias).  The futures have a bullish bias for the day with harmony between the technical side (bullish) and the Quant side (bullish). But for the moment harmony means nothing when both the highest time frames are in control and Volatility is ready to break out higher. Scenarios for the day:

• 1) Strange Trend Day down we open gap down and start with a push back toward the previous close.  We find resistance on or before the previous close then begin the downtrend for the day. We usually find midday chop around either possible queen or king support area. Then the second half of the day we usually start with a head fake looking to continue the primary trend of the morning, but it may not be a head fake we could push down hard through the close or  or vice versa 36% probability