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 continued to tick to the upside yesterday. The day ended closing 4.67 points higher. The market gapped up at the open 6.45 points.
I mentioned yesterday that there was still a slight bias for the S & P to take out Tuesday's high because the daily bar closed at 61% of the range. And the market did comply with that expectation by taking out Tuesday's high by 7 cents.
Not a very strong conviction, but never the less, the market did as expected.
But, yesterday's low also took out the prior day low.
So this qualifies yesterday's price bar as an outside day, which is when a price bar makes a higher high and a higher low.
This is slightly different than a key reversal day.
A key reversal day is also an outside day, but the difference is that the price bar will close either above the prior day high or the below the prior day low.
This is typically seen as a stronger price set up.
But, yesterday's daily bar did close at 89% of the range of the daily bar which suggests that the odds are very high that yesterday's high of 3,119.45 will be violated before the low of 3,101.76.
Support from yesterday's daily price bar is in the 3,110 area. Pre open, the S & P is trading about 5 points higher, so yesterday's high should be violated right at the open.
In addition, to support at the 3,110 area, support should also come in around 3,118.
On the upside, watch for resistance around the 3,128 area.
This is just below the resistance level from last week's weekly price bar, which is in the 3,130 to 3,136 area.
The midpoint from this week's weekly price bar so far is 3,107.32 and at this point, the market is about 10 points above it. A close above it would be bullish. So, watch this level today if the market pulls back.
Also, watch last week's close of 3,140.98. I suspect the market will make a run to test it, but it has to clear the 3,122 area, which is where technical resistance is.
DOCU is trading about $6 higher after reporting last night. ULTA reported as well and is trading about $19 higher.
Here are the Key Levels for the Markets:
$VIX:
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 <
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 closed out at 14.52 yesterday. The VIX has now had two closes under 14.85, which now suggests that the VIX should drop to 12.50 again.
15.63 should be resistance, as well as the 14.85 level.
13.80 is a technical support level, so a break under this level and it should also confirm a move lower.
SPX:
Minor level: 3,164.08
Major level: 3,125.00 < Hit
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 at 3,117.43. The S & P is now back within 8 points of the major 3,125 level.
3,115 should now be a minor support level.
Watch the 3,122 area for possible resistance. If the S & P can clear this level, it should head higher.
QQQ:
Major level: 206.26
Minor level: 205.48
Minor level: 203.91
Major level: 203.13 HIT
Minor level: 202.35 **
Minor level: 200.78
Major level: 200.00
Minor level: 199.22
Minor level: 197.77
Major level: 196.88
The QQQ closed at 202.83. With the QQQ reclaiming the major 203.13 level, the minor 202.35 level should be support. And should still be support.
Watch to see if the QQQ can clear 203.91. If it can close above this level for two days, it should test 206.26.
203.30 is a minor technical reistance level. If the QQQ clears this level, it should head higher.
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
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 160.94. The IWM closed exactly on the 160.94 line. I will count that as a close above it, so if the IWM can close above it today, it should head higher.
Watch this level again today. It needs to clear this level to head higher.
Minor technical resistance is at 161.20. If the IWM clears this level, look for a move higher.
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: 135.84
Minor level: 132.81
Major level: 131.25
The TLT closed at 139.12. I would expect a drop to 137.
139.85 should now be resistance.
Technical support is around 138 and technical resistance is at 140.
Watch for a breakdown or breakout. Still waiting for this.
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: 134.38
The GLD closed at 139. Watch the 140.63 level on the upside. The GLD needs to clear it to head higher.
At this point, I am biased for a move down to 137.
Technical resistance is at 139.40. Watch this level today.
The key level is 134.38 on the downside. If the GLD has two closes under this level, it could drop to 125.
XLE:
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
Minor level: 55.86
Minor level: 55.08
Major level: 54.69
The XLE closed at 58.60. The XLE closed exactly on the minor 58.60 line. It needs to clear this level to head higher. If it can't, I would expect a drop.
57.50 should now be support. And the 59.25 area should offer technical resistance. It will need to clear this area to head higher.
AAPL:
Major level: 281.25
Minor level: 277.35
Minor level: 269.54
Major level: 265.63 HIT!
Minor level: 261.72
Minor level: 253.91
Major level: 250.00
Minor level: 246.88
Minor level: 240.63
Major level: 237.50
Apple closed at 265.58. Apple closed just under the major 265.63 level.
Minor support is at 263.68.
Technical support should now be in the 264 area.
WATCH LIST:
Bullish Stocks: AMZN, LMT, ROP, HUM, SHOP, NTES, ADBE, FLT, DPZ, BDX, LULU, VRTX, NVDA, FB, BABA, RH, PEN, V, DECK, ROKU, COUP
Bearish Stocks: AAP, TAP, IRBT, FL, CHL, OXY, IRM
Be sure to check earnings release dates.
