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 500 looked like it would sustain the rally that started a few days ago when it managed to hold and close above the lower band on the daily chart for 3 days.
But, after gapping up at the open almost 75 points, the market ran out of steam and proceeded to sell off all day.
The high for the day ended up at 2,756.89 before the market sold off and dropped to a low of 2,657.67.
The intraday range ended up at 99.22 points. This was about 75% of the daily average true range, which is now 132.81 points.
The high for the day ended up stopping within 20 points of the 2,776 level I mentioned yesterday.
This price level was the 61.8% retracement level of the last minor downswing.
Once again, knowing these levels in advance can prove quite helpful.
But to have considered shorting the morning rally, you would have had to scale down to a 10 minute chart to see that the S & P 500 stalled right at the upper band on that chart.
With the daily price bar closing at 2% of the range of the daily bar, the odds do favor a violation of the low before the high.
Watch the 2,700 to 2,707 area for possible resistance.
Pre open, the S & P is trading about 26 points higher.
This would project to an open around 2,685 or about 15 points under the resistance level. The S & P will need to clear this area to continue higher.
Support on the downside should be around 2,641, which was last week's high. Now that it has been violated, it should be support.
I do need to point out that the bullish percent index now reads 79.2%.
It has climbed back to overbought territory. And has done it in less than a month.
Here are the Key Levels for the Markets:
$VIX:
Major level: 40.62
Minor level: 39.84 **
Minor level: 38.28
Major level: 37.50
Minor level: 36.72
Minor level: 35.16
Major level: 34.38
Minor level: 33.60
Minor level: 32.03
The VIX closed at 46.70. The VIX closed 1.46 points higher. The close was still below the upper band, which now reads 55.17.
A retest of the upper band is not out of the question due to the fact that the VIX had traded well above it.
But, at this point, it should be resistance.
Resistance should also be around 50. And support around 45.
S & P 500:
Minor level: 3,007.85
Major level: 2,968.80
Minor level: 2,929.75
Minor level: 2,851.65
Major level: 2,812.50
Minor level: 2,773.45
Minor level: 2,695.35
Major level: 2,656.30 <
Minor level: 2,617.25
Minor level: 2,539.06
Major level: 2,500.00
Minor level: 2,460.95
Minor level: 2,382.85
Major level: 2,304.75
Minor level: 2,226.65
The S & P closed at 2,659.41. The market managed to close again above the major 2,656.30 level.
This would now suggest that the minor 2,617 level should be support.
The next level on the upside is 2,695.35. If the S & P can hold this level, look for a push to 2,812.50.
There is short term resistance at 2,788. Clearing this level would be very bullish.
Support should be at the major 2,500 level and around 2,570.
QQQ:
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
The QQQ closed at 196.40. The QQQ is actually back the midband on its daily chart and managed to close just above it. The midband is 195.44.
This level should now be support.
Minor resistance is right around 200. And support should be around 190.
IWM:
Major level: 175.00
Minor level: 173.44
Minor level: 170.31
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 <
Minor level: 148.44 **
Minor level: 145.31
Major level: 143.75
The IWM closed at 112.92.
Still trading below the lower band on the daily chart, which is now 115.25.
With all other major markets above their lower bands, I would expect the IWM to follow. So, watch the lower band again today.
Support should be around 110. And technical resistance at 130.
TLT:
Major level: 156.25
Minor level: 155.48
Minor level: 153.91
Major level: 153.13
Minor level: 152.35
Minor level: 150.78
Major level: 150.00
Minor level: 149.22
Minor level: 147.66
Major level: 146.88
Minor level: 146.10
The TLT closed at 166.30. The TLT closed under the upper band on the daily chart for the first time in about a week and one half. The upper band is now 166.39.
So, watch this level today. If it cannot clear this level today, I expect a pullback.
Resistance should be around 167. And support at 163.
GLD:
Major level: 159.38
Minor level: 158.60
Minor level: 157.03
Major level: 156.25 <
Minor level: 155.47
Minor level: 153.91
Major level: 153.13
Minor level: 152.35
Minor level: 150.78
Major level: 150.00
Minor level: 149.22
Minor level: 147.67
Major level: 146.89
Minor level: 146.11
The GLD closed at 156.04. Next minor level is 157.03. If the GLD can close above 157.03, it should make a run to 159.38.
The 164 area should now be resistance. And 152 should be support.
XLE:
Major level: 56.25
Minor level: 55.47
Minor level: 53.90
Major level: 53.12
Minor level: 52.34
Minor level: 50.78
Major level: 50.00
Minor level: 49.22
Minor level: 47.65
Major level: 46.88
Minor level: 46.09 **
Minor level: 44.53
Major level: 43.75
The XLE closed at 32.08. The XLE did actually trade above the lower band, but could not close above it. the lower band is 32.23 and the XLE is now within 25 cents of closing above it.
The lower band is resistance until the XLE can close above it.
The 31 area should now be technical support. And resistance is at 37.
AAPL:
Major level: 325.00
Minor level: 321.88
Minor level: 315.63
Major level: 312.50
Minor level: 309.38
Minor level: 303.13
Major level: 300.00
Minor level: 296.88 **
Minor level: 290.63
Major level: 287.50 <
Minor level: 284.38
Minor level: 278.13
Major level: 275.0 0
Minor level: 271.88
Apple closed at 259.43. Apple is still in an uptrend on its daily chart.
It held the midband, even though Apple closed slightly lower. This level should now be support, which is 238.
The 255 area should be technical support. Resistance is at 270.
WATCH LIST:
Bullish Stocks: TLT, REGN, WMT, TTWO, GILD, PDD, MRNA, OMI
Bearish Stocks: AZO, MELI, ORLY, ANTM, FLT, CTAS, ALGN, ECL, LH, WHR, WCN, DGX, DLTR, CRI, WPC, OMC
