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.
CURRENT POSITIONS:
GOGO Long at $19.93
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DUST Long $4.50
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OI Long Feb $19 call @ $1.70
MDR Long @ $9.31
FB Long Feb $135 Call @ $10.60
FB Short Feb $145 Call @ $5.90
PHM Long Dec $25.50 put @ $0.80
PHM Short Dec $24.00 put @ ($0.35)
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I mentioned quite a few pressure points for this market on Friday. The two main ones, at least in my opinion, are the upper band on the monthly chart and the midband on the daily chart.
As it turns out, the market continued higher and closed at 2,759.99, up 22.19 points on the day.
This put the S & P 500 back above the upper band on the monthly chart which now reads 2,741.91. And it also suggests that the upper band is back to a support level.
And the S & P 500 also managed to close above the midband on the daily chart. The midband is 2,752.79 and the market closed about 7 points above it.
Just like the upper band on the monthly chart, this level should now be support.
The support level from Friday's daily bar is in the 2,747 to 2,749 area.
As for the weekly price bar for the S & P 500, it was a strongly bullish bar. It actually reversed two prior bearish closes which is very bullish.
And the range for the week was 110.91 points, as compared to the weekly average true range of 83.75 points. So, the range expanded by about 130%. Expanding markets are also a sign of bullishness.
The support area from last week's weekly price bar is in the 2,705 area.
And finally, let's take a look at the monthly price bar.
The November monthly price bar ended up closing at 70% of the bar. This puts the odds of taking out the high of 2,815.15 before the low of 2,631.09 squarely at 70%.
And the range also expanded. The range for the month was 184 points, as compared with the monthly average true range of 139 points. Just like the weekly price bar, the monthly price bar expanded by about 130%.
Support from the November monthly price bar is in the 2,700 to 2,723 area.
Pre open, the S & P 500 is trading a whopping 38 points higher based on news out of the Summit that the US and China will agree to negotiate and resolve their trade differences. They announced a 90-day pause in tariffs with an agreement to resume negotiations.
This has resulted in all markets soaring before the open. Can anyone say Santa Clause rally?
Finally, President Trump has announced a national day of mourning for President Bush. All market will be closed this Wednesday, December 5th, for a national day of mourning.
Earnings do continue this week, but they are slowing down as we wind down to the end of this quarter.
Continue to monitor the levels as I mentioned above.
Here are the Key Levels for the Markets:
$VIX:
Major level: 31.25
Minor level: 29.69
Minor level: 26.56
Major level: 25.00
Minor level: 23.44
Minor level: 20.31 **
Major level: 18.75 <
Minor level: 17.19 **
Minor level: 14.06
Major level: 12.50
The VIX closed at 18.19. It closed down 0.60 for the day. This puts the VIX under the major 18.75 level which should now be resistance.
Two closes under 17.19 and the VIX should test 12.50 again. On the upside, 19.53 is minor resistance.
SPX:
Minor level: 2,805.20
Major level: 2,793.00 <
Minor level: 2,780.78
Minor level: 2,756.33 **
Major level: 2,744.10 <<
Minor level: 2,731.90
Minor level: 2,707.50
Major level: 2,695.30
Minor level: 2,683.10
Minor level: 2,658.70
Major level: 2,646.50
Minor level: 2,634.30
Minor level: 2,609.90
Major level: 2,597.70
The S & P 500 closed above the major 2,744.10 level. And it had the first close above the 2,756.33 level. This now suggests that a close above 2,756.33 and the objective becomes 2,793.
The S & P 500 should take out the major 2,793 level at the open. This would suggest that the minor 2,756.33 level should be support on a pullback. And 2,780.78 should also be support.
QQQ:
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 <
The QQQ closed at 169.37. It closed 1.22 points higher. The QQQ did not close above the midband on the daily chart but it should no doubt clear this level at the open. That level is 169.45 and the QQQ getting above it pre open, it should offer support on a pullback.
Support should be at the minor 170.31 if the market does pullback.
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 152.62 on Friday. It was up 0.79 on the day.
The objective is now to the 156.25 level.
153.13 should offer support on the downside.
TLT:
Major level: 115.63
Minor level: 115.24
Minor level: 114.45 **
Major level: 114.06
Minor level: 113.67
Minor level: 112.89
Major level: 112.50
Minor level: 112.11
Minor level: 111.33
Major level: 110.94
The TLT closed at 115.33. The 115.63 level should be the objective and Friday closed 30 cents under it.
Minor support is in the 115.04 area. Minor resistance is around 116.02.
GLD:
Major level: 118.75
Minor level: 117.97
Minor level: 116.41
Major level: 115.63
Minor level: 114.85 **
Minor level: 113.28
Major level: 112.50 <
Minor level: 111.72
Minor level: 110.16
Major level: 109.38
The GLD closed at 115.54. The GLD would need two closes under 114.85 to drop to 112.50.
115.23 is a minor support level. If the GLD cannot clear it, I would expect the GLD to head lower.
On the upside, 116.02 is minor resistance.
XLE:
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 <
Minor level: 64.85 **
Minor level: 63.28
Major level: 62.50
The XLE closed at 66.11. It will need two closes above 66.41 to move higher. And pre open, the XLE should take out that level.
65.63 is now support. 67.97 should be resistance.
FXY:
Major level: 85.94
Minor level: 85.75
Minor level: 85.36
Major level: 85.16
Minor level: 84.97
Minor level: 84.58 **
Major level: 84.38 <
Minor level: 84.18
Minor level: 83.79
Major level: 83.59
The FXY closed at 84.22. On the upside, minor resistance is at 84.57.
The FXY is oversold, but it will have to clear 84.38 to head higher. I would prefer two closes above it.
On the downside, I would expect strong support at 82.81. And I would not expect the FXY to take it out. If it does, look for it to head lower.
AAPL:
Minor level: 204.69
Minor level: 201.56
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
Minor level: 179.69
Minor level: 176.56
Major level: 175.00
Like a lot of stocks this morning, Apple should pop off the open. It is trading about $5.70 higher before the open.
Look for 181.25 to offer support if Apple does pullback.
WATCH LIST:
Bullish Stocks:BIIB, GWW, ANTM, DPZ, BDX, CI, AMGN, MCD, CBRL, CLX, WDAY, ADP, JNJ, ADSK, UHS, VRSK, ESRX, UAL
Bearish Stocks: NOC, LLL, UTX, DGX, BG, PZZA, SLB, GIS, SIMO, EBIX
Be sure to check earnings release dates.
