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 New Year has started off with the market selling off 23 points on Friday. Market tend not to like things like the threat of wars.
And this morning, the market should follow through to the downside.
Pre open, the S & P 500 is trading about 17 points lower pre open, so expect more turbulence.
Friday's close ended up at 3,234.85. And the range for the day was 23.81 points, which exceeded the daily average true range of 20.20 points.
The projected pre market open would mean that the S & P should open about 5 points below the low from Friday.
Watch this price level, which is 3,222.34. The other intra day levels to watch would be in the 3,230 to 3,234 area.
The weekly price bar closed 5.17 points lower. And the weekly range was only 46.11 points. This was less than the weekly average true range of 61.47 points.
Last week's low was 3,212.03 and the projected open should be about 5 points above it. So, watch the weekly low. A violation of the low would suggest the market should head lower.
If the market does find support at the low, then resistance should be at 3,235.
The market is still well above the upper band on the monthly chart. The upper band is 3,083.
This should be support until it is violated.
Short term intra day charts for the S & P still remain bullish. The 200 ema is 3,176 and the midband is 3,156.
So, the market could drop another 80 points with the market still in an uptrend. Based on where the market is trading, large swings can be expected.
Pre open, the S & P is now trading about 18 points 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 14.02. For the day, the VIX was up about 12.5%.
A close today above 13.28 would suggest a move up to 15.63.
The VIX could go as high as 18.75 without affecting the bull trend.
Watch the minor levels for the VIX as well today.
SPX:
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
Minor level: 2,773.45
The S & P closed at 3,234.85. With a close under the minor 3,242.15 level today, I would expect a drop to 3,125.
Major support should come in at 3,125. And watch the 3,203 level. It should offer minor support. If it can't, a drop to 3,164 is possible.
Technical support is around 3,232. With a projected open under this level, it should be resistance on a rally.
The next level of technical support is 3,208.
QQQ:
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 <
Minor level: 211.74
Minor level: 210.17
Major level: 209.39
Minor level: 208.61
Minor level: 207.04
Major level: 206.25
Minor level: 205.48
Minor level: 203.91
Major level: 203.13
The QQQ closed at 214.18. With a close udner 214.87 today, the QQQ should drop to 212.50.
212.50 should now be support.
And the 213 area should offer technical support. Watch this level today. A break under it and the QQQ should drop to 210.
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 165.13. At this point, 167.19 should be resistance. A drop to 162 should be the objective.
The minor 164.06 level should offer support. If the IWM cannot clear 167.19, it should continue down.
The 166 area should offer technical resistance. A retest of the 164 area is likely.
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. A close today above 138.38 and the TLT should move up to 140.63.
138.28 should offer support. And technical support is at 137.
A move above 139 and the TLT would be overbought short term.
GLD:
Major level: 146.89
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
Minor level: 136.72
Minor level: 135.16
Major level: 134.38
The GLD closed at 145.86. A close today above 144.54 and the GLD should move up to 146.11.
The GLD continues to be overbought short term, based on the marketwide news.
144.54 is the upper band in the 60 minute chart and the GLD is trading above it.
137.50 should be strong support. So if the GLD does break under it, I would expect it to head lower.
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 60.40. The XLE should also continue higher at the open.
Watch for support at the 60.16 level. The objective should be up to 62.50.
Technical support is around 60.
AAPL:
Major level: 300.00 Hit
Minor level: 296.88 **
Minor level: 290.63
Major level: 287.50
Minor level: 284.38
Minor level: 278.13
Major level: 275.00
Minor level: 271.88
Minor level: 265.63
Major level: 262.50
Apple closed at 297.43. Watch the 296.88 level on the downside. It should be support, so if Apple breaks under it, expect a further sell off.
287.50 should offer support. And minor support is at 290.63.
And Apple is up against the upper band on the daily chart. That level is 300.
The 292 area should offer technical support.
WATCH LIST:
Bullish Stocks: TSLA, NOC, ROP, ADBE, NTES, MA, AAPL, LRCX, NOW, GS, RTN, BABA, LHX, FB, MCD, DE, COUP, CB
Bearish Stocks: ALXN, TSCO, SQ, CLB, UFS, QGEN, MAC, BEN
Be sure to check earnings release dates.
