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 S & P reversed yesterday, after three days of selling pressure. The market closed 67.12 points higher.
The S & P closed out at 3,398.96.
As a reader of this daily update, you most likely recognize the significance of this yesterday's close.
If you don't, I will explain it a bit later.
But first, let me share some details from yesterday's daily price bar. The first fact is that the range for the day was 57.93 points. The intra day range worked out to be about the daily average true range, which is now 55.59 points.
And the daily price bar closed at 55% of the range of the daily bar. This still gives a slight bias to the high being violated before the low.
The support area from yesterday's daily price bar is in the 3,384 area. Above this level, there is support around 3,395.
The longer term support levels should also be valid. They are the monthly support area, which is around 3,370.
And last week's weekly support level is around 3,469.
Pre open, the S & P is trading about 6 points lower. This projects to an open around 3,392. This would be between the daily support level. So, watch the daily levels.
Two final points before I close out for the day. The first is regarding the 5% close percentage from Tuesday and the projection that Tuesday's low should have been violated.
Once again, this projection was nullified with a bullish gap open.
The market gapped 37.98 points at the open. This was greater than 50% of the daily average true range.
The bullish gap will often nullify the close percentage projection. And as it turned out, yesterday's low was 3,366.84, which was just the weekly support area.
The final comment is regarding the close. The S & P managed to close at 3,398.96.
This was just above the minor 3,398.35 level. The significance of this is the fact that if the S & P closed under this level yesterday, the downside objective would then be 3,281.20.
By managing to close above it, this now means the S & P would still need two closes under this level to head lower.
But, it also confirms the bullish in this market.
RH reported and is trading about $60 higher pre market.
And finally, Thursday afternoon we get earnings from CHWY and PTON.
Here are the Key Levels for the Markets:
$VIX:
Minor level: 32.03
Major level: 31.25 <
Minor level: 30.47 **
Minor level: 28.91
Major level: 28.13
Minor level: 27.35
Minor level: 25.78
Major level: 25.00
Minor level: 24.22
Minor level: 22.66
Major level: 21.88
Minor level: 21.10
The VIX closed at 28.81. For the day, the VIX closed 2.65 points lower. This was a loss of 8.42%.
At this point, the minor 30.47 level should be resistance. And a close under this level would suggest a drop to 28.13.
The VIX pulled back from the upper band on its 60 minute chart, as expected. The midband is 24.55 which should be support. So, watch this level.
Also, the midband on the daily chart is 25.61, which is right around the 60 minute level.
S & P 500:
Major level: 3,593.60 <
Minor level: 3,554.55
Minor level: 3,476.45
Major level: 3,437.40
Minor level: 3,398.35 **
Minor level: 3,320.25
Major level: 3,281.20 <
Minor level: 3,242.15
Minor level: 3,164.00
Major level: 3,125.00
Minor level: 3,085.95
Minor level: 3,007.85
Major level: 2,968.80
The S & P closed at 3,398.96. With the S & P reclaiming the 3,398.35 level, it should be support now.
If the S & P can hold this level, I would expect a move back up to 3,437.
The S & P gapped above the midband on the 60 minute chart. This level is 3,364 and should be support. Also, technical support is at 3,389.
QQQ:
Minor level: 298.44
Minor level: 295.31
Major level: 293.75
Minor level: 292.19
Minor level: 289.06
Major level: 287.50
Minor level: 285.94
Minor level: 282.81
Major level: 281.25
Minor level: 279.69
Minor level: 276.56 **
Major level: 275.00
Minor level: 273.44
Minor level: 270.31
Major level: 268.75
Minor level: 267.19
The QQQ closed at 277.88. The QQQ closed 7.93 points higher. This was a pop of 2.94%.
Watch the minor 276.56 level today. A close today above it and the QQQ should test 281.25.
Like the S & P, the QQQ managed to clear the midband on the 60 minute chart. That price level is 275 and should be support.
Also, support from yesterday's daily bar is in the 276 area.
IWM:
Major level: 162.50
Minor level: 160.94
Minor level: 157.81
Major level: 156.25
Minor level: 154.70
Minor level: 151.56 **
Major level: 150.00 HIT
Minor level: 148.44
Minor level: 145.31
Major level: 143.75
Minor level: 142.19
Minor level: 139.06
Major level: 137.50
Minor level: 135.94
The IWM closed at 152.13, closing 2.27 higher. With a close today above 151.56, the IWM should test 156.
153 is the midband on the 60 minute chart and the IWM is just under it. It will need to clear this level to head higher.
The 151 area should provide technical support.
TLT:
Major level: 171.88
Minor level: 171.10
Minor level: 169.53
Major level: 168.75
Minor level: 167.97
Minor level: 166.41
Major level: 165.63
Minor level: 164.85
Minor level: 163.28
Major level: 162.50 <
Minor level: 161.72
Minor level: 160.16
Major level: 159.38
The TLT closed at 163.30, closing .44 lower. The TLT closed just above the minor 163.28 level. The TLT should test 165.63. But if it breaks under 163.28, expect a move lower.
Technical resistance is now around 166. And also around 165. Watch this area.
Short term charts remain bearish.
GLD:
Major level: 190.63
Minor level: 189.85
Minor level: 188.28
Major level: 187.50
Minor level: 186.72
Minor level: 185.16
Major level: 184.38
Minor level: 183.60
Minor level: 182.03 **
Major level: 181.25 < HIT
Minor level: 180.47
Minor level: 178.91
Major level: 175.00
The GLD closed at 183.05. The GLD closed 1.76 higher on the day. Biased for a test of the 184 level.
But, the GLD needs to clear the resistance at 183.
Short term momentum has turned bearish. The technical resistance level is 183.
XLE:
Minor level: 41.41
Major level: 40.63
Minor level: 39.83
Minor level: 38.28
Major level: 37.50
Minor level: 36.72
Minor level: 35.15
Major level: 34.37 HIT
Minor level: 33.59 **
Minor level: 32.03
Major level: 31.25
Minor level: 30.47
Minor level: 28.90
Major level: 28.12
The XLE closed at 33.83. The XLE hit the 34.37 objective as expected.
Watch the minor 33.59 level. Two closes under this level and the XLE should drop to 31.25.
Short term the XLE is oversold. It is right at the lower band on the 60 minute chart, which is 33.51.
AAPL:
Major level: 150.00
Minor level: 146.88
Minor level: 140.63
Major level: 137.50
Minor level: 134.38
Minor level: 128.13
Major level: 125.00
Minor level: 121.88
Minor level: 115.63 **
Major level: 112.50 <
Minor level: 109.13
Apple closed at 117.32. Apple closed 4.50 higher. A close today above 115,63 and Apple should test 125.
Also, Apple closed under the upper band on the daily chart. That price level is 124.50 and should now be resistance.
Technical support is right at 113. Watch to see if Apple can hold this level.
WATCH LIST:
Bullish Stocks: ORLY, ZM, AVGO, FDX, MMM, CAT, NLE, ALXN, ZEN, ALB, CHWY, KR, DKS, WMGI
Bearish Stocks: BDX, BIB, BA, IBM, CB, TRV, DLTR, LW, CVS, PSX, VLO, OMC, HSIC, EOG, KEX, WBA, NBR, FANG, JBL, CSOD
