While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to 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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As I mentioned yesterday, I expected another slow day ahead of the the release of the Non Farm Payroll this morning.
And that is what happened.? The range for the day was 10.07 points.? Compared to the average true range (ATR) of 14.57 points, the range was less than 70% of the ATR.
Knowing what to expect for the day can help you to avoid holding day trades for moves that may not exist.? If you expect a contraction, you want to book profits when price bumps up against resistance.
Also, when you have a reasonable expectation of where support and resistance should be, you can scalp the swings.
For example, yesterday, the S & P 500 bounced off the 2,390 level three times before selling off.? I said this in yesterday's update: "On the upside, I expect resistance at 2,390.60".
The first top ran to 2,391.43.? The second top stopped at 2,390.67.? And the third top stalled at 2,390.75.
From there, the S & P 500 sold off and stalled at 2,380.35.? On the downside, we were looking for support in the 2,382 to 2,384 area.
It also happened to stall right at the lower extreme bollinger band on the short term 10 minute chart for the S & P 500.
Based on expecting a contraction, you could have anticipated the low for the day was in.
And once the S & P 500 put in the low for the day, where did it rally back to?
Right back to 2,390.
It's nice to have these figures ahead of time.
The Non Farm Payroll at 8:30 EST, which is in just a few minutes.? The initial reaction should tell us if an expansion will happen today.
Here are the Key Levels for the Markets:
$VIX:
Minor level: 14.45
Major level: 14.06
Minor level: 13.67
Minor level: 12.89
Major level: 12.50
Minor level: 12.11
Minor level: 11.33
Major level: 10.94 <
Minor level: 10.55 <
Minor level:? 9.77
Major level:? 9.38 Strong support
The VIX closed at 10.68. just under the major 10.94 level and above the minor 10.55 support level.
10.94 should still offer resistance and I would not expect the VIX to exceed 11.33 on the upper end.? If it does, it should go higher.
Downside support should be at 10.16.
$SPX:
Major level: 2,406.30 <
Minor level: 2,398.48 **
Minor level: 2,382.82
Major level: 2,375.00
Minor level: 2,367.20
Minor level: 2,351.60
Major level: 2,343.80
Minor level: 2,335.98
Objective is still to 2,406.30.
2,386.70 should offer support.? And below that price, I would expect 2,384.80 to offer support as well.
On the upside, resistance is still at 2,390.60.? If the market can clear this level, it should then become support.
QQQ: ?
Minor level: 138.28
Major level: 137.50 <
Minor level: 136.72
Minor level: 135.16
Major level: 134.38
Minor level: 133.60
Minor level: 132.03
Major level: 131.25
The QQQ closed at 137.04, just under the major 137.50 level.
136.91 should also be minor support. Minor resistance is at 137.21.
IWM:
Minor level: 141.41
Major level: 140.63
Minor level: 139.85 ***
Minor level: 138.28
Major level: 137.50 <
Minor level: 136.72
Minor level: 135.16
Major level: 134.38
The IWM closed at 138.10, just 18 cents under the 138.28 level.? The low for the day was 137.11, just 39 cents under the major support level of 137.50.
137.50 should continue to offer support. 139.06 could offer minor resistance.
TLT: ?
Major level: 125.00
Minor level: 124.22
Minor level: 122.66
Major level: 121.88 <
Minor level: 121.09 **
Minor level: 119.53
Major level: 118.75
Minor level: 117.96 ?
The TLT broke under the 121.88 level, closing at 121.18.? At this point, 121.88 should be major resistance.
I expect a move down to around 115.
GLD: ?
Major level: 125.00
Minor level: 124.22
Minor level: 122.66
Major level: 121.88
Minor level: 120.32
Minor level: 119.53
Major level: 118.75 <
Minor level: 117.97
Minor level: 116.41
Major level: 115.63 <
The GLD is within one point or the 115.63 objective.? I would expect a bounce at that level.
116.41 is a minor support level.? A break under 116.41 and expect the GLD to head lower.? 117.97 is minor resistance.
XLE:
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
Minor level: 67.97 <<
Minor level: 66.41
Major level: 65.63
The XLE is within a point of the 65.63 objective.? A move down to the 62 is still the long term objective.
66.80 should be minor resistance.? 66.02 could offer minor support. ?
FXY:
Major level: 89.06
Minor level: 88.67
Minor level: 87.89
Major level: 87.50
Minor level: 87.11
Minor level: 86.33
Major level: 85.94? <
Minor level: 85.55
Minor level: 84.77
Major level: 84.38
The FXY closed again under 85.94, closing at 85.71.? At this point, I would expect strong resistance at 87.50. ?
The next level down is 85.55.? Two closes under that level and it should drop to 84.38.
85.74 should be minor resistance.
AAPL:
Major levels for Apple are 150, 143.75, 137.50, 131.25, and 125.
Apple closed just above the 146 support level, at 146.53.? Objective is still up to 150.
148.44 should be minor resistance and 146 should be support.
WATCH LIST:
Bullish Stocks: AMZN, GOOGL, GD, ANTM, COST, JAZZ, UNH, HON, MON, BABA, DLR, WDC, CRM, PNW, CAKE,
Bearish Stocks: SJM, CL, ESRX, MNST, OXY, HIBB, SBH, HLX
Be sure to check earnings release dates
