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.
CURRENT POSITIONS:
GOGO Long at $19.93
Total Premium Collected $1.95
ASNA Long at $14.20
Total Premium Collected $0.75
DUST Long $4.50
Total Premium Collected $0.70
SNAP Long at $14.54
Total Premium Collected - $1.65
RRC Long at $11.85
Total Premium Collected $0.70
RIG Long at $8.81
Premium Collected - $0.81
FEYE Long at $17.18
Total Premium Collected $0.80
Short April 12th - $17.50 call @ $0.25
FCX Long at $12.74
Total Premium Collected $0.73
Short April 12th - $13.50 call @ $0.25
CLW Long May - $20.00 call for $2.00
CLW Short May - $22.50 call for $1.00
FB Long April 12th - $172.50 Put for $1.64
FB Short April 12th - $167.50 Put for $0.58
.........................................................................................
I suspect the most glaring thing about Friday is that the S & P 500 took out the objective of 2,890.60 I have been calling for. The high Friday actually took it out by 2.64 points. And the market actually managed to close above it.
The close was 2,892.74, or about 2 points above our target.
But, if you have been a reader of this update, you probably are not that surprised. This is because the targets I call for usually get hit once they are confirmed.
In fact, the only time I can recall an upside objective failing was back when the market cleared the 2,890.60 for the first time.
That was back in September of 2018 when the S & P 500 actually had two closes above 2,910.15. This put the target to the major 2,968.80 level.
And that is when the market failed and had the strong pullback into the December 24, 2018 bottom which, as it turned out, was a wonderful buying opportunity.
I do recall at that time that I said the market would retest the major 2,812.50 level. And it certainly has, managing to not only close above it but to close above the next major level.
So, what should we expect this time?
Once again, because the S & P 500 broke through the major 2,812.50 level, I would expect the market to retest that level in the event of a selloff below it.
The 2,968.80 level is a very key level.
This is the level that is not usually violated on the first attempt. And that failure did precede the deep pullback the first time it approached it.
This is now the second time that this major level will get tested.
The question is will it clear it this time?
If it can, I would expect the market to continue higher. If it can't, expect another selloff.
A failure at the third attempt would, in my opinion, set up a situation where the market would move into a bear market.
But, we are a long way away from that. However, I wanted to share with you the significance of these levels.
The real question with this information is simply this. Have you used this information to pull money out of the market?
If you do use these levels to help you trade, please email me and let me know how you go about incorporating the resistance levels into your trading.
If you currently do not use this information, then you will probably be interested in Wednesday's webinar. I will show you a simple way to use the levels to your advantage.
The support level from Friday's daily bar is in the 2,888 area.
In looking at last week's weekly price bar, we see that it did close at 98% of the weekly bar. This still puts the odds of violating last week's high before the low.
The only bearishness from last week with the range was only 45 points as compared with an average weekly range of 80 points.
Generally, you want to see moves that approximate the average moves. But, the weekly price action was still bullish.
Pre-open, the S & P 500 is trading about 3 points lower.
Here are the Key Levels for the Markets:
$VIX:
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
Minor level: 10.16
Major level: 9.38
The VIX finally hit our objective. The low for the day was 12.17, which was 33 cents under our objective of 12.50.
And for the day, the VIX closed at 12.82.
At this point, 13.28 should be resistance. And to drop to 9.38, the VIX will need two closes under 11.72.
The VIX is back down to major support. This puts us on alert that a reversal could happen.
SPX:
Major level: 2,968.80
Minor level: 2,849.25
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
Minor level: 2,636.75
Minor level: 2,597.65
The S & P 500 closed the day at 2,892.74. The 2,890.60 level was hit.
At this point, 2,871 should be support. And to move higher, the S & P 500 will need two closes above 2,910.15. And 2,846.70 is a minor support level.
Both the 30 and 60 minute charts continue to be bullish. 2,862 is technical support.
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 184.66. The upside target is still to 187.50. And the QQQ is now within 3 points of it.
Support should be at 181.25. 184.38 should now be a minor support level.
Like the S & P 500, both short term charts are bullish. Technical support is at 182. Continue to buy against support.
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 < HIT!
Minor level: 154.69
Minor level: 151.56 **
Major level: 150.00 <
Minor level: 148.44
The IWM closed at 157.38. The IWM hit our target of 156.25. And it finally cleared the midband on the daily chart.
The midband is 156.07 and the IWM managed to close above it. Look for support at this level now.
At this point, the S & P 500 will need two closes above 157.81 to move higher. And 154.69 should be support.
155.08 is a minor support level. And the 155 area should offer technical support.
TLT:
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
Minor level: 124.61
Minor level: 123.83 **
Major level: 123.44 <
Minor level: 123.05
Minor level: 122.27
The TLT closed at 124.03. Biased for a retest of 125.
If the TLT does break under 123.44, I would expect support at 121.88. Short term support, however, is at 123.44.
Technical support is at 123.
GLD:
Major level: 126.56
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: 121.09
Minor level: 119.53
Major level: 120.31
Minor level: 119.92
Minor level: 119.14
Major level: 118.75
The GLD closed at 121.98. The GLD continues to trade around the major 121.88 level.
121.09 is minor support.
The 60 minute chart still remains in a downtrend. And now the 30 minute chart crossed into a downtrend. This now suggests that rallies should be sold. However, the daily has moved into an uptrend.
Technical resistance is around 123.
XLE:
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 <
Minor level: 64.85
Minor level: 63.28
Major level: 62.50
Minor level: 61.72
Minor level: 60.16
Major level: 59.38
The XLE closed at 67.61. Still, expect a move up to 68.75.
The XLE continues to move towards the midband, which is 68.82. Clearing that level is another issue. But, I am biased for the XLE to clear the midband.
I would expect strong support at the 65.63 level.
Short term charts remain bullish. Buy against support.
FXY:
Major level: 89.84
Minor level: 89.65
Minor level: 89.26
Major level: 89.06
Minor level: 88.87
Minor level: 88.48
Major level: 88.28
Major level: 87.50
Major level: 86.72
Major level: 85.94 <
Minor level: 85.75 **
Minor level: 85.36
Major level: 85.16
Minor level: 84.97
The FXY closed at 85.38. Watch to see if the FXY can clear 85.94. It should be resistance, so if it can get above it, I would expect a bounce.
Still biased for a drop to 85.16. And the FXY is now within 22 cents of it.
Technical resistance is still around 86.
AAPL:
Major level: 200.00 <
Minor level: 198.44 **
Minor level: 195.31
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
Apple closed at 197. Objective is still to 200 and Friday came within $3 of it.
195.31 should be support. And 193.75 is also a support level.
Technical support is at 193.
WATCH LIST:
Bullish Stocks: ULTA, AVGO, FLT, COST, MMM, AMGN, MCD, OLED, CMI, ALXN, XLNX, WST, PYPL, SBUX, FL, CREE, CSCO, CRUS, BEN
Bearish Stocks: PEN, RH, FANG, SQ, ABC, XEC, COP, MC, SAIL, BITA
Be sure to check earnings release dates.