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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Friday, the S & P 500 closed lower by 19.44 points. It closed out the day at 2,918.65.
And the range for the day ended up being 35.60 points. This was just under the daily average true range, which is now 37.96.
But, the day ended up being an inside day. It made a lower high and a higher high.
This does suggest we will see a range expansion. And perhaps it will be today.
Pre open, the S & P 500 is trading about 18 points lower.
Assuming this trading holds up into the open, the S & P should open right around Friday's low, which was 2,900.15.
This should be a key level and it appears it will be tested right off the open.
A violation suggests that the market should continue lower. If the low can hold, I would expect a bounce.
If the market does bounce, I would expect a test of 2,917 or to possibly 2,924.
These are the resistance levels from Fridays daily bar.
In looking at the weekly price bar, we see that Friday closed out the second consecutive bearish close.
Two weeks ago, the S & P had the 93.81 point drop and last week was 13.40 points.
Last week closed at 82.8% of the weekly bar. And it formed a hammer bar, which is bullish.
The support level from a hammer bar should be half way between the close and the low.
That price level should be in the 2,870 area.
With the S & P 500 falling under the lower band on the 60 minute chart, a retest is the most likely scenario.
And with the projected open at around 2,900, the S & P 500 should open around 50 points above the lower band on the 60 minute chart.
That price level is 2,850.46. Assuming the market continues lower, that should be a key level to watch.
I also want to point out that the weekly average true range is 116.60. This was over 150% of last week's range, which was 75.04.
And the weekly price bar closed at 82.8% of the weekly price bar. So, this does favor last week's high being violated before the low.
With a projected lower open today, this suggests weakness early in the week and and possible support to come in during the week.
Earnings do continue this week. CSCO reports Wednesday after the close. And BABA reports Thursday before the open.
And NVDA reports Thrusday after the close.
Here are the Key Levels for the Markets:
$VIX:
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
Minor level: 19.53
Major level: 18.75
Minor level: 17.97 **
Minor level: 16.41
Major level: 15.63
The VIX closed out the week at 17.97. It ended the day up at 1.06. And like the S & P, the VIX formed an inside day.
With the VIX closing right on the minor 17.97 line, this would suggest that if the VIX can close under 17.97 today, it should drop to 15.63.
17.19 is a minor support level. So, if it drops under 17.19 it should head lower.
20.31 is minor resistance.
SPX:
Minor level: 3,164.08
Major level: 3,125.00
Minor level: 3,085.95
Minor level: 3,007.85
Major level: 2,968.80
Minor level: 2,929.73
Minor level: 2,851.58 **
Major level: 2,812.50 <<
Minor level: 2,773.45
Minor level: 2,695.35
Major level: 2,656.30
The S & P closed the day at 2,918.65. This now suggests that if the S & P closes under 2,929.73 today, it should drop to 2,812.50.
2,905.30 is a minor support level. A break under this level and the S & P should continue lower.
2,929.70 should be minor support.
QQQ:
Major level: 196.88
Minor level: 196.10
Minor level: 194.53
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
The QQQ closed at 186.49. The QQQ took out the 187.50 objective we were looking for.
185.94 should offer support. A break under this level and the QQQ should head lower.
The QQQ will need to clear 187.50 to head higher.
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 150.62. 150 should be support. So, if the IWM breaks under 150, it should head lower.
Though it is below the midband on the daily chart, the daily chart continues to move closer to an uptrend.
Like the S & P, a retest of the lower band on the 60 minute chart is the likely scenario. That price level is 147.89.
TLT:
Major level: 143.75
Minor level: 142.97
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
Minor level: 133.60
The TLT closed at 140.05. It is still above the upper band on the daily chart, which is 139.04.
I don't expect a serious pullback until it closes back inside the upper band.
139.06 is still minor support. And a move up to 143 is possible if it holds.
GLD:
Major level: 143.75
Minor level: 142.97
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: 134.48
Minor level: 133.60
Minor level: 132.03
Just like the TLT, the GLD is seriously overbought. It closed out at 141.26.
If the GLD would still need two closes above 141.41 to head up to 143.75.
141.50 is a minor resistance level. And 139 should be support.
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
The XLE closed at 59.10 on Friday. 58.59 is a minor support level. A break under this level, and the XLE should head lower.
60.16 is a minor resistance level on the upside. The XLE will need to clear 59.38 to head higher.
AAPL:
Major level: 212.50
Minor level: 209.38
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
Apple closed at 200.99. Apple managed to close back above the major 200 level.
It will now need two closes above 203.13 to move up to 212.50.
200 should offer support. If that can't hold, look for support at 193.75.
WATCH LIST:
Bullish Stocks: GOOGL, CNG, NOC, SHOP, IAC, MLM, MCD, RTN, VRSK, UHS, CB, ZBH, FIS, ROKU, CBOE, RS, SBUX
Bearish Stocks: ALGN, MMM, NVDA, FFIV, CAT, BIDU, FTV, VLO, GRUB, SQ, WUBA, CNC, NTAP, MO, XEC, CLB
