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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X Long at $11.33
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The market experienced some profit-taking yesterday. The day closed 8.83 points lower. The day closed out at 3,320.79.
Even though the market closed lower, it still managed to close above 3,320.25.
For most people, this seemed rather bearish, but you know the significance of a close above the confirming line of 3,320.25. This now puts the objective for the market higher.
But we need to be mindful that all the sentiment indictors are overbought ... and have been for a while.
And the VIX is at all-time lows once again.
And the market is sitting right up against the upper band on the daily chart. In fact, yesterday's high of 3,329.79 came within 5 points of the upper band, which is now 3,333,94.
Pre open, the S & P is trading about 13 points higher. Assuming this holds until the open, the market should open around 3,333.
This would put the open above yesterday's high.
That would suggest that yesterday's high of 3,329.79 would be support on a pullback.
If that level does not hold, the midpoint of 3,323.20 should also be a support level.
NFLX reported and is relatively flat. IBM is up about $5 after reporting.
Thursday after the close, we get earnings from INTC and SWKS.
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 12.85. This was the first close above 12.50 in a while. And yesterday's high went to 13.13, which was still below the 13.28 level, which should still be resistance.
It would need to close under 11.72 to move lower.
So, resistance should still be at 12.50 now. And at the minor 13.28 level.
Watch to see if the VIX drops back under 12.50 today. If it does, the market should continue higher on the gap.
S & P 500:
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 3,320.79. This was the second close above the minor 3,320.25 level.
This now suggests that the S & P should head up to 3,427.40. Watch for support at the major 3,281.20 level.
Technical support is still at 3,320.
QQQ:
Major level: 225.00
Minor level: 224.22
Minor level: 222.69 **
Major level: 221.91 HIT!
Minor level: 221.13
Minor level: 219.56
Major level: 218.78
Minor level: 218.00
Minor level: 216.43
Major level: 215.65
Minor level: 214.87
Minor level: 213.30
Major level: 212.50
The QQQ closed at 223.28. This was the second close above 222.69. This now suggests that the QQQ should move up to 225.
Also, the QQQ closed above the upper band on its daily chart. That level is 222.49. And yesterday closed above it.
At this point, it should now be support.
221.91 should be support. And technical support is at 222.
IWM:
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
Minor level: 154.69
Minor level: 151.56
Major level: 150.00
The IWM closed at 167.67. The next upside level is 170.31. Two closes above this level and the objective should be to 175.
For the IWM to drop to 162.50, it will need two closes under 167.19.
The upper band is 168.47 and the IWM closed under it. This level should now be resistance.
167.40 is technical support and the IWM is right at that level. If it cannot hold this level, look for further movement to the downside.
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 Hit
Minor level: 135.84
Minor level: 132.81
Major level: 131.25
The TLT closed at 139.47. At this point, the TLT will need two closes above 138.28 to move higher. And if the TLT can close above 138.28, it should move above 140.63.
The 140 area should be resistance. And technical support is around 138.
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 146.74. Watch the major 146.89 level. If the GLD can clear this level, it should move higher.
146.89 should be minor resistance until it is violated.
The 145 area should still offer technical support.
Watch the 146.11 level on the downside.
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 58.06. This was the first close under the minor 58.60 level. This now suggests that if the XLE closes under 58.60 today, it should drop to 56.25.
Another significant fact is that the XLE closed under the midband, which is 59.01. This level should now be resistance.
The XLE is oversold short term and a bounce should be expected.
AAPL:
Major level: 325.00
Minor level: 321.88
Minor level: 315.63 **
Major level: 312.50
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
Apple closed at 316.57. Yesterday was the second close above 315.63. This now suggests that Apple should move up to 325.
The upper band is now 316.04 and Apple is just above it.
315.63 should offer support.
The 315 area should offer technical support.
WATCH LIST:
Bullish Stocks: GOOGL, TSLA, SHOP, LMT, NOC, NTES, ADBE, AAPL, NOW, LRCS, COST, MA, AAPL, LRCX, INTU, BDX, NVDA, FB, HD
Bearish Stocks: FICE, CVX, CLB, MDP, TEX