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I am writing this in the evening because I actually have to report for jury duty today. After roughly 40 years of avoiding this civic duty, I figure I should not fight this time. I am bringing this up because if I am called for a case, I will not be able to host the webinar this week. I will keep you posted.
After gapping up at the open, the S & P 500 spent the entire day trading mostly lower.
The high for the day of 2,778.94 was made right off the open. The high was one of the resistance levels I mentioned this morning. That price was 2,779 and today's high fell right on it.
After hitting the high and reversing, the S & P 500 dropped to a low of 2,749.22.
So, the closing percentage of 20% from Friday, which suggests there was an 80% chance that Friday's low would be violated before the high, proved accurate.
Monday's close percentage worked out to be 22%, so the odds of violating the low of 2,749.22 before the high of 2,778.94, is about the same as Friday's.
Resistance from Monday's daily bar is in the 2,764 to 2,765 area.
There are a few other significant facts about the market at the moment that are worth mentioning.
The first is the fact that the S & P 500 is trading just above the midband on the daily chart. That price level is 2,738.52 and I usually expect support at that level the first time that price approaches it.
So, a violation of the midband would be a significant event.
The second fact about Monday is that both the S & P 500 and the VIX closed to the downside.
I usually use this as an indication that a turning point is close. We will see if that is the case this time.
And the final comment about the market at the moment is this.
I expect support at the major 2,744.10 level. And the market is just above it. Watch this level to see if it holds.
If it can't, it is a sure indication that the market should head lower.
Continue to monitor last week's weekly high and low. The high was 2,816.94 and the low was 2,749.03.
And the resistance levels from last week's weekly bar is in the 2,766 to 2,793 area.
The close of 2,767.78 should also be monitored.
Earnings continue this week. Thursday, we will hear from a few of the leading stocks, including GOOGL, AMZN, CMG, and BIDU.
Microsoft also reports Wednesday after the close.
Continue to monitor the levels as I mentioned.
Here are the Key Levels for the Markets:
$VIX:
Major level: 25.00
Minor level: 23.44
Minor level: 20.31
Major level: 18.75 <
Minor level: 17.19
Minor level: 14.06 **
Major level: 12.50
Minor level: 10.94
Minor level: 7.81
Major level: 6.25
The VIX closed at 19.57. To move lower, the VIX will need two closes under 17.19. And to move higher, it will need two closes above 20.31.
As I mentioned, both the VIX and the S & P 500 closed lower. Watch this divergence.
20.31 is a minor resistance level.
18.75 should be minor support. A break under 18.75 and the VIX should continue lower. I don't see the VIX dropping under 15.63.
SPX:
Major level: 2,939.50
Minor level: 2,927.28
Minor level: 2,902.83
Major level: 2,890.60
Minor level: 2,878.40
Minor level: 2,854.00
Major level: 2,841.80
Minor level: 2,829.60
Minor level: 2,805.20
Major level: 2,793.00
Minor level: 2,780.78
Minor level: 2,756.33 ***
Major level: 2,744.10 <
Minor level: 2,731.90
Minor level: 2,707.50
Major level: 2,695.30
2,758.80 is a resistance level. And watch the major 2,744.10 level.
Short term charts do remain bearish, so another drop should happen before heading higher. It looks like we got that yesterday.
2,725 is the lower band on the 60 minute chart. A test of it is likely. Watch to see if it can hold.
QQQ:
Major level: 193.75
Minor level: 192.19
Minor level: 189.06
Major level: 187.50
Minor level: 185.94
Minor level: 182.81
Major level: 181.25
Minor level: 179.69
Minor level: 176.56
Major level: 175.00
Minor level: 173.44
Minor level: 170.31 **
Major level: 168.75
The QQQ closed at 173.91. 171.88 should offer minor support. If the QQQ does close under 171.88 for two days, it could drop to 162. Same as yesterday.
But, watch for support at 171.88.
The QQQ needs to clear 175 to head higher.
IWM:
Major level: 168.75
Minor level: 167.19
Minor level: 164.06
Major level: 162.50
Minor level: 160.94
Minor level: 157.81 **
Major level: 156.25
Minor level: 154.69 **
Minor level: 151.56
Major level: 150.00
The IWM closed at 153.03. Biased for a test of 150.
The midband should now be resistance. That level is 157.87.
The lower band on the 60 minute is 149.20. Technical resistance is at 165.30.
I the IWM can hold the 153.13 level, it could bounce sharply.
TLT:
Major level: 115.63
Minor level: 115.24
Minor level: 114.45
Major level: 114.06
Minor level: 113.67 **
Minor level: 112.89
Major level: 112.50
The TLT closed at 113.56. A close under 113.67 and the TLT should test 112.50.
And if the TLT has two closes under 113.67, it should drop to 112.50.
A break under 113.67 and the TLT should head lower. Now it should be resistance, as well as 114.06.
GLD:
Major level: 117.19
Minor level: 116.80
Minor level: 116.02 **
Major level: 115.63 <
Minor level: 114.85
Minor level: 113.28
Major level: 112.50
Minor level: 111.72
Minor level: 110.16
Major level: 109.38
The GLD closed at 115.71. Watch to see if the GLD can hold 115.63. If it can't, look for a push down to 113.
I would not expect this bounce to move higher than 118.75.
Longer term I am looking for a move to 112.50.
XLE:
Major level: 78.13
Minor level: 77.35
Minor level: 75.78
Major level: 75.00 <
Minor level: 74.22
Minor level: 72.66 **
Major level: 71.88
Minor level: 71.10
Minor level: 69.53
Major level: 68.75
The XLE closed at 70.74. This now sets up a scenario where if the XLE closes under 71.10 today, it should drop to 68.75.
71.88 should now be resistance. As well as 75.
Longer term, a move to 62 is possible.
FXY:
Major level: 85.94
Minor level: 85.75
Minor level: 85.36
Major level: 85.16
Minor level: 84.97 **
Minor level: 84.58
Major level: 84.38 <
Minor level: 84.18
Minor level: 83.79
Major level: 83.59
The FXY closed at 84.70. Look for the FXY to test 84.38.
If 84.38 can't hold, a test of the recent lows should be the next move.
Minor support at 84.57.
AAPL:
Major level: 231.25
Minor level: 229.69
Minor level: 226.56
Major level: 225.00
Minor level: 223.44
Minor level: 220.31 **
Major level: 218.75 <
Minor level: 217.19
Minor level: 214.06
Major level: 212.50
Apple closed at 220.65. 218.75 should be support. A close today above 220.31 and Apple should test 225.
220.31 is a minor support level.
WATCH LIST:
Bullish Stocks: ANTM, CME, LH, AWK, WBA, WBA, LW, PEG, CNK, NYT, DAR, TDS
Bearish Stocks: BIDU, GD, MLM, BABA, IBM, ITW, RHT, RCL, WYNN, SWKS, ALNY, WLK, SINA, CCL, SLB, MNST
Be sure to check earnings release dates.