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.
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Now that the S & P 500 is within 9 points of the 2,250 objective I have been calling for, you have to ask yourself if you believed that prediction when I made it some time ago.? I don?t remember exactly when I said that was the ultimate target for the S & P 500, but I recall on a few occasions stating it was the ultimate objective for this market.
Whether you believed it at the time or not, is irrelevant, what is important was my recent pleadings to not consider shorting into this market.? Hopefully, I discouraged you from doing that if you had the thought.
What is important is that our resistance levels give us an indication as to whether the market should continue higher or reverse ? and strategic levels where support or resistance should come in.
And with specific price levels that help to confirm whether a move should continue or not.? The recent example is the 2,203.12 level.? I wrote on a few occasions that if the
S & P 500 should close for two days above 2,203.12, it would confirm the move up to 2,250.
When that happened, we had a clear objective to the upside.
Then after the market topped out at 2,213.35 on November 25th, we were looking for support to hold at one of the lower support / resistance levels.
It just so happened that on December 2nd, the market stopped at 2,187.44.?? Coincidentally, our support level happens to be 2,187.50.? Just 6 cents above where the market stopped.? Or is it coincidence?
I do want to mention that I call all the prices I share resistance levels.? They become either support or resistance depending upon where price is trading.? For example, once a resistance level is exceeded, it should now be support.? And vice versa as price drops.
The question facing us now is when will profit taking come into the markets?
Yesterday we had the first clue that profit taking could emerge.? The clue is rather subtle, but it is one to be aware of.
It is simply that BOTH the S & P 500 and the VIX closed to the upside.? And with the VIX at all time lows, we need to pay attention to a possible pullback.
Finally, the upper band on the 60 minute chart for the S & P 500 is 2,254, which coupled with the resistance level of 2,250, suggests we should hit it.
Continue to monitor the levels for entry points.
Here are the Key Levels for the Markets:
$VIX:
Major level ? 14.06
Minor level ? 13.67
Minor level ? 12.89
Major level - 12.50
Minor level ? 12.11*
Minor level ? 11.33
Major level ? 10.94
Major level ?? 9.38 ***
Yesterday?s low for the VIX stopped right on the 11.33 line, before reversing to close at 12.22.
This is within 30 cents of the 12.50 level. For a bottom in the VIX to form, it would have to move up to the 15.63 level on this drive.? If it stalls at 14.06, expect further upside in the markets.
$SPX:
Minor level ? 2,265.62
Major level - 2,250.00
Minor level - 2,234.38
Minor level - 2,203.12 * <
Major level - 2,187.50 *
Minor level - 2,171.88
Minor level - 2,140.62
Major level - 2,125.00
Minor level - 2,109.38
Minor level - 2,078.12
Major level - 2,062.50
The S & P 500 blew through the 2,218 price level to close at 2,241.35, on it?s way to the objective of 2,250.
2,234 should offer minor support. 2,257.80 could offer resistance.? Short term, the S & P is overbought.
QQQ:
Major level - 121.88
Minor level - 121.10
Minor level - 119.53 *
Major level - 118.75 *
Minor level - 117.97
Minor level - 116.41 *
Major level - 115.63 ***
Minor level - 114.84
Minor level - 113.28
Major level - 112.50
The QQQ blew through the 117.40 level to close at 118.25, just 50 cents under the objective of 118.75.
117.19 should be support and 119.53 resistance.
TLT:
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 ? 118.75 **
Minor level - 117.96
The TLT finally started to bounce from it?s oversold condition.? It closed at 120.40, just above 119.53.? The implication is that if the TLT closes above 119.53 today, it should retest 121.88.
Still expect 122 to be major resistance on a rally.
GLD:?
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
Major level: 106.25
The GLD closed at 111.83, so if it closes above 111.72 today, it should test 112.50. 112.50 should be resistance on a rally. Momentum is bearish.
XLE:
Major level ? 78.12
Minor level ? 76.56
Minor level ? 75.78 *
Major level - 75.00
Minor level - 74.22 *
Minor level - 72.66
Major level - 71.88
Minor level - 71.10
Minor level - 69.53
The XLE closed back above 75.78 yesterday, at 75.95.? A close today above 75.78, and it should move up to 78.12.
Minor resistance is at 76.17. 75.59 should be minor support.
FXY:
Minor level: 87.89
Major level: 87.50
Minor level: 87.11
Minor level: 86.33
Major level: 85.94 **
Minor level: 85.55
Minor level: 84.77 **
Major level: 84.38
The FXY closed at 84.83 yesterday.? A close today above 84.77 and it should try and test 85.94.
Resistance should still be at 84.96 and 85.16.
AAPL:
Major levels for Apple are 118.75, 115.63, 112.50, 106.25, 100, 93.75, and 87.50.
Apple held support at 109.38.? The low for the day was 109.16 before it reversed and closed at 111.03. ?Momentum shift to the upside.
WATCH LIST:
Bullish Stocks: LMT, GS, FDX, GD, BA, RTN, AET, CMI, PSX, SLB, JPM, APA, WDC, CLR, NBL
Bearish Stocks:? AGN, PANW, JAZZ, ATHN, CRM, CRL, UA, HBI
Be sure to check earnings release dates.
