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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On the light volume, half trading trading session on Monday, the markets continued to diverge.
The DOW made new highs, while the S & P 500 closed 5.60 points to the upside. As these two markets continued their push to the upside, the NASD market continued to be the laggard.
The NASD Composite closed 30.36 points to the downside, while the QQQ closed 1.45 points to the downside, at 136.19. The QQQ could drop to 131.25 and the uptrend would still remain intact.
The NASD appears set to open with a bias to the upside. The question now is will the NASD bounce and come inline with the DOW and the S & P 500, or will the other major markets sell off?
I do think the VIX will make another bounce. The question is when. Friday it closed above the major 11.33 level. I do believe that the higher levels will continue to offer resistance on a bounce. The major level being 12.50.
Market wide news releases are light this week, with the exception of the non farm payroll on Friday at 8:30 EST.
Continue to follow the resistance levels.
Here are the Key Levels for the Markets:
$VIX:
Minor level: 14.45
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 ***
Minor level: 10.55 <
Minor level: 9.77
Major level: 9.38
The VIX closed at 11.22 on Monday. At this point, a retest of 9.38 should be anticipated, however, 10.16 could offer support.
Watch the 10.94 level. If the VIX gets under that level, it should continue lower.
With a spike above the upper band on the short term charts, I would expect restest of the upper band at some point. The upper band on the 30 minute chart is 12.38.
$SPX:
Major level: 2,500.00
Minor level: 2,484.38
Minor level: 2,453.12
Major level: 2,437.50
Minor level: 2,421.88 <
Minor level: 2,390.62
Major level: 2,375.00
Minor level: 2,359.38
Minor level: 2,328.12
Major level: 2,312.50
The S & P 500 closed back above the 2,421.88 level. The S & P 500 did get above the 2,437.50 level, but sold off as anticipated.
Minor support is 2,421.90. And 2,429.70 continues to be a key short term level the market. If the market opens above it, look for it to act as support.
QQQ:
Major level: 143.75
Minor level: 142.18
Minor level: 139.06
Major level: 137.50 <
Minor level: 135.94
Minor level: 132.81
Major level: 131.25
Support should be at 135.94. I don't see the QQQ selling off below 135.16, however if it does, it should head lower.
137.50 should now offer resistance.
IWM:
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
The IWM is showing more strength than the QQQ. It closed at 142.10 on Monday. This now implies that if the IWM can close above 141.41 today it should move up to 143.75.
141.41 should offer minor support.
TLT:
Major level: 131.25
Minor level: 130.47
Minor level: 128.91
Major level: 128.13 **
Minor level: 127.35 <
Minor level: 125.78
Major level: 125.00
Minor level: 124.22
Minor level: 122.66
Major level: 121.88
The TLT closed at 124.46, under the mid band on the daily chart and the major 125 level. To move down to 121.88, the TLT will need two closes under 124.22.
123.83 is a minor level I would not expect the TLT to violate. If it does, expect it to head lower.
125 should now be resistance.
GLD:
Major level: 125.00
Minor level: 124.22
Minor level: 122.66
Major level: 121.88
Minor level: 120.32
Minor level: 119.53 ***
Major level: 118.75 <
Minor level: 117.97 ***
Minor level: 116.41
Major level: 115.63
The GLD sold off and closed at 116.09. At this point, a retest of 115.63 should be the next move. If this level does not hold, a move to 112.50 should be expected.
114.60 is minor support. A break under that level would also confirm a move down to 112.50.
XLE:
Minor level: 69.53
Major level: 68.75
Minor level: 67.97
Minor level: 66.41 **
Major level: 65.63 <<
Minor level: 64.85
Minor level: 63.28
Major level: 62.50
Minor level: 61.72
The XLE finally closed above 65.63, at 66.17 on Monday. To move up to the next level, the XLE will need two closes above 66.41.
65.63 should now be 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
Minor level: 83.60
Minor level: 83.20
Major level: 82.81
The FXY broke and closed at 84.82 on Monday. 84.38 should be the objective.
85.94 should now be resistance. 83.98 could offer minor support. And minor resistance is at 85.16.
Continue to trail a stop if you followed the short strategy.
AAPL:
Major levels for Apple are 162.50, 156.25, 150, 143.75, and 137.50
Apple closed at 143.50, just under the 143.75 level. 143.36 is minor support. And if Apple does break under that level, a move to 141 should be expected.
Short term momentum remains bearish.
WATCH LIST:
Bullish Stocks: HUM, GS, FDX, CMI, WBC, CME, MCO, DGX, TSO, WAB, JPM, STT, NKE, HIG, DAL
Bearish Stocks: AZO, ORLY, JACK, GOLD, PZZA, QCOM, AMBA, SIMO, BGS, ACIA, AMC
Be sure to check earnings release dates.
