Stock Market Update: Bulls Eyeing Key Resistance Levels After Implied Volatility Crush
The stock market finished higher yesterday, with the S&P 500 gaining around 1%. It was a day of implied volatility crush, amplified by a negative gamma regime. The VIX fell below 20, boosting the S&P 500, but this upward trend may not last long with the Presidential debate and CPI report looming.
Investors are cautiously optimistic amidst concerns about the U.S. economy’s health and uncertainty surrounding the Fed’s upcoming interest rate decision. Index futures have edged lower slightly, with bulls eyeing two key resistance levels to sustain the rebound:
1. 5,500 Level: Keep an eye on the 5,500 region, a big gamma level likely to provide significant resistance for the index.
2. Zero Gamma Level at 5,520: Breaking above this level might open a path to around 5,520, but breaking beyond that before data releases on Wednesday will be challenging.
Oracle’s earnings report was in line with expectations, leading to a higher stock price. Options positioning was bullish, similar to setups seen with Nvidia and Broadcom. Keep an eye on Wingstop, which may indicate the next move for the equity market based on its head-and-shoulders pattern.
In conclusion, the stock market is facing key resistance levels as investors navigate through uncertain economic conditions and upcoming data releases. Keep a close watch on key levels and individual stock movements to make informed investment decisions.