While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to a six-month time frame, Mad Day Trader, provided by Bill Davis, will exploit money-making opportunities over a brief ten minute to three-day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points.
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The market continues with this run. For the day, the S & P 500 closed at 2,886.73. It was up 13.39 points on the day.
The S & P 500 has now run almost 176 points in six days.
This snapback is actually faster than the drop.
Actually, it is exactly one half of the time of the drop from 2,892.5 to the pivot bottom at 2,728,81. That sell-off took 12 days and it is recouped all that sell-off in 6 days.
Quite frankly, this is highly unusual. The normal tendency is for the drops to be faster than the upmoves.
Is there any implication to this?
Right now, I don't know. That is because I can't recall a situation like this.
But, my general inclination is that this may end poorly.
That is because fast upmoves generally have big retracements when they run out of steam.
I may be wrong, but that is usually how markets respond. Perhaps, it will be different this time. One thing for sure is that we will find out.
Clearly, the objective for the S & P 500 was to the 2,890.60 level and the market move about 15 points above it before closing just under it.
Pre open, the S & P 500 is trading about 12 points higher, so it should open above the 2,890 level. So, I would expect support at 2,890 if the market does pullback.
Watch the next minor level which is 2,910.15. This is the next upside confirming line. Two closes above this level and the target becomes 2,968.80. As you know, I consider this a very significant level for the market.
I do want to mention that the 30 minute chart has crossed into an uptrend. The 60 minute chart is still bearish, but this does indicate that the short term momentum has shifted to the upside.
Support from yesterday's daily price bar should be in the 2,895 area.
Earnings do continue this week, but the number of companies reporting is slowing down as we come to the end of this quarter.
Here are the Key Levels for the Markets:
$VIX:
Major level: 21.88
Minor level: 21.10
Minor level: 19.53
Major level: 18.75
Minor level: 17.97
Minor level: 16.41 **
Major level: 15.63 <
Minor level: 14.85
Minor level: 13.28
Major level: 12.50
Minor level: 11.72
The VIX closed yesterday at 16.04. To move higher, the VIX will still need two closes above 16.41 to move higher.
15.63 held as support yesterday with a low of 15.84. To mobe lower, the VIX will need to drop under this level.
The key levels for the VIX are 16.41 on the upside and 14.84 on the downside.
A break above or below either one should signal the VIX will continue in that direction.
SPX:
Major level: 2,968.80
Minor level: 2,949.25
Minor level: 2,910.15 **
Major level: 2,890.60 < < HIT
Minor level: 2,871.08 **
Minor level: 2,832.03
Major level: 2,812.50
Minor level: 2,792.98
Minor level: 2,753.93
Major level: 2,734.40
Minor level: 2,714.88
Minor level: 2,675.83
Major level: 2,656.30
The S & P 500 did clear the 2,890.60 level, as expected. At this point, the key level is the minor 2,910.15 level. Two closes above this level and the S & P 500 should test 2,968.80.
But, after making a two-level run, this could offer some resistance. And 2905.30 should offer support today.
Technical support should be in the 2,850 area.
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
Minor level: 167.19
The QQQ closed at 183.15. This now implies that if the QQQ can close above 182.81 today, it should move up to 187.50.
181.25 should now be support. And 178.13 should offer strong support.
And the minor 182.81 level should offer support.
IWM:
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 <
Minor level: 148.44
Minor level: 145.31
Major level: 143.75
The IWM closed at 151.75. A close today above 151.56 and the IWM should test 156.25.
But, the IWM will still need to contend with clearing the midband which is 155.77.
150 should be strong support. And a move above the minor 153.13 level I would expect the IWM to head higher.
TLT:
Major level: 134.38
Minor level: 133.60
Minor level: 132.03 **
Major level: 131.25 < HIT
Minor level: 130.47
Minor level: 128.91
Major level: 128.13 <
Minor level: 127.74
Minor level: 126.95
Major level: 126.56
Minor level: 126.17
Minor level: 125.39
Major level: 125.00
The TLT closed out at 130.50. The TLT will still need two closes under 130.47 to test 128.13.
It is still clinging to the upper band which now reads 130.45. A close under this level should indicate more move to the downside for the TLT.
128.13 should offer strong support. And 129.69 is minor support.
GLD:
Major level: 128.13
Minor level: 127.74
Minor level: 126.95
Major level: 126.56 << HIT
Minor level: 126.17
Minor level: 125.39
Major level: 125.00 <
Minor level: 124.22
Minor level: 122.66
Major level: 121.88
Minor level: 121.49
Minor level: 120.70
Major level: 120.31
The GLD closed at 125.33. The low for the day stopped 7 cents above the major 125 level.
125 should offer support, so if the GLD breaks under it, I would expect more movement to the downside. If this should happen, watch the 123.44 level.
Two closes under 123.44 would suggest a drop to 119.
XLE:
Major level: 65.63
Minor level: 64.85
Minor level: 63.28
Major level: 62.50 <
Minor level: 61.72
Minor level: 60.16 **
Major level: 59.38
Minor level: 58.60
Minor level: 57.03
Major level: 56.25
Minor level: 55.47
Minor level: 53.91
Major level: 53.91
The XLE closed at 61.45. The XLE should test 62.50. And yesterday's high came to within 50 cents of it.
Look for 60.94 to offer support as well.
The trend is still bearish, so if the XLE cannot clear 62.50, I would expect a pullback. 62.50 is the key at the moment.
AAPL:
Minor level: 203.13
Major level: 200.00
Minor level: 196.88
Minor level: 190.63 **
Major level: 187.50 <
Minor level: 184.38
Minor level: 178.13 **
Major level: 175.00
Minor level: 171.88
Minor level: 165.63
Major level: 162.50
Apple closed at 192.58. A close today above 190.63 and I would expect Apple to test 200.
187.50 should offer strong support. And I would expect strong resistance at 200.
Buy against support.
WATCH LIST:
Bullish Stocks: LMT, SHOP, MA, LLL, COST, MLM, APD, MCD, CME, SAGE, V, CB, WIX, HSY, RACE, DG, IR, FIS, LLY
Bearish Stocks: GOOGL, FANG, APC, COP, WUBA, DDS, XEC, KSS, WDC, SINA, CNQ
Be sure to check earnings release dates.
