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 had a slight sell off yesterday. For the day, the market was closed 4.98 points lower.
It closed the day out at 3,283.15.
Even though the market had a minor selloff, it still managed to close above the major 3,281.20 level.
With a close above this level, it should now act as support. And I would also expect strong support at the minor level under 3,281.20, which is 3,242.15.
To move up to the next major level, the S & P would need two closes above 3,320.25. If that does happen, the target would then be to 3,427.40.
Having said that, I am cautious that the market may experience a meaningful pullback. And there are a number of reasons for that thinking.
The first of course, is that the upper band on the daily chart is at 3,319. And this is right at the minor level I mentioned above.
And typically, after a major level is taken out, the next minor level will often act as resistance.
The second reason and concern for a pullback is that all the sentiment indicators all overbought.
These are all charts we will take a look at on today's webinar.
Support from yesterday's daily bar should be in the 3,284 to 3,286 area.
And the day closed out at 35% of the daily range. So, there is a bias for yesterday's low to be violated before the high.
Monitor the high and low for a violation. Yesterday's high was 3,294.25 and the low was 3,277.19.
This week we begin earnings season.
This morning, we got earnings from GS and BAC. GS is trading slightly to the downside, and BAC is relatively flat after reporting.
And Thursday morning, we get earnings from MS.
Pre open, the S & P is trading about a point lower.
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 Friday at 12.39. The VIX did trade under the 12.50, hitting a low of 12.05.
Resistance should be at 12.50 now. And at the minor 13.28 level.
This is now at the long term major support level. Watch this level for support. If it does break under 12.50, watch the next minor level, which is 11.72.
13.28 should be resistance. The 13 area is also technical resistance.
SPX:
Major level: 3,427.40 <
Minor level: 3,398.35
Minor level: 3,320.25 **
Major level: 3,281.20 <
Minor level: 3,242.15
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
The S & P closed at 3,283.15. The next minor level on the upside is 3,320.25. Two closes above this level and the S & P should head up to 3,437.40.
3,281.20 should now act as support.
Technical support is still at 3,290.
QQQ:
Major level: 221.91 <
Minor level: 221.13
Minor level: 219.56 **
Major level: 218.78 HIT!
Minor level: 218.00
Minor level: 216.43
Major level: 215.65
Minor level: 214.87
Minor level: 213.30
Major level: 212.50
Minor level: 211.74
Minor level: 210.17
Major level: 209.39
The QQQ closed at 220.08. This was the second close above the 219.56 level. The objective for the QQQ should be up to 221.91.
The QQQ is right at the upper band on the daily chart. The upper band is now 220.81. Watch to see if the QQQ can clear the upper band.
So, the QQQ continues to be the strongest of the major markets.
Support should be at 218.78. And technical support is at 219.50.
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 166.57. The objective for the IWM should be up to 168.75. And yesterday's high was within 1 point of it.
The 164.06 level should continue to offer support.
And the 165 area should also offer technical support.
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 138.73. The objective for the TLT should now be to 140.63.
137.50 should continue to be support. And technical support should be at this level as well.
GLD:
Major level: 150.00
Minor level: 149.22
Minor level: 147.67
Major level: 146.89 Hit
Minor level: 146.11 **
Minor level: 144.54
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
The GLD closed at 145.69. The objective should be for a drop to 143.75.
The GLD would have to reclaim 146.11 to head higher. But, it should be resistance.
146 should be resistance.
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 59.84. The objective should be up to 62.50. But, at this point, it will need to clear 60.16. And yesterday, for the third day, the XLE closed just below it.
Watch for support at the 59.38 level.
Technical support is still around 59.
AAPL:
Minor level: 315.63 **
Major level: 312.50 Hit
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: 275.00
Apple closed at 312.68. Apple would still need two closes above 315.63 level to move higher. Even though it sold off, it remained above the 312.50 level and the upper band.
The upper band is now 310.
312.50 should offer support.
The 309 area should offer technical support.
WATCH LIST:
Bullish Stocks: GOOGL, CHTR, LMT, ADBE, NTES, MA, AAPL, NVDA, GS, RTN, FB, LHX, CME, MCD, HD, COUP, MSFT, SPOT, SPLK, UHS, IBM
Bearish Stocks: AAP, FFIV, DLTR, TSCO, CTSH, DD, FIZZ, THS, RAMP, BERY, CIT, SIX
