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.
CURRENT POSITIONS:
GOGO Long at $19.93
Total Premium Collected $1.95
ASNA Long at $14.20
Total Premium Collected $0.75
DUST Long $4.50
Total Premium Collected $0.70
SNAP Long at $14.54
Total Premium Collected - $2.10
RRC Long at $11.85
Total Premium Collected $0.70
RRC Long at $9.20
RIG Long at $8.81
Premium Collected - $1.45
FEYE Long at $17.18
Total Premium Collected $0.80
AMC Long at $16.16
Total Premium Collected $0.35
.........................................................................................
The market continued higher yesterday and went right to the next minor level above 2,890.60, which as you know is 2,910.15.
Actually, the high for the day was 2,910.61. Sorry, it missed it by 46 cents.
I know I am being a bit tongue-in-cheek, but the fact of the matter is that you do know that the next upside level after a major level can often offer resistance. Or support on the downside.
Especially after a two or three-level move.
The S & P 500 had a two-level move off the last major pivot low. That level was 2,734.40 and in seven days, the S & P 500 ran two levels to 2,890.60.
Then yesterday, it ran up to the minor 2,910.15 and reversed off it.
So, what does this imply for the markets now?
I think there are a few things we need to be mindful of. The first of course is that the move up was fast. As I said yesterday, it was starting to look tired. And as it turned out, the market did stall virtually on the minor level.
Knowing these levels in advance can help you to predetermine what to expect. And the expectation was that the market would react.
Because the market ran two levels, the key support will be at the minor level under the major 2,890.60 level, which is 2,871.08.
This is because if the S & P 500 has two closes under this level, it should then drop to 2,812.50.
The main concern I have is that this move travelled two levels and has now reversed.
This is because in bull markets, price usually moves three levels.
A two-level move does make me concerned that something in the market is changing.
If the market drops one level and reverses, which is what I expect at this time, it would certainly change my view.
But the key is to be aware of the possible scenarios.
Resistance from yesterday's daily bar should be in the 2,894 area.
And pre open, the S & P 500 is trading about 4 points lower. So, on the upside watch the 2,894 area and on the downside, the key level will be 2,871.08.
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
The VIX closed yesterday at 16.06. To move higher, the VIX will still need two closes above 16.41 to move higher. And the VIX still has not closed above it.
The VIX did slightly get under the 15.63 level, with a low of 15.50. But, 15.63 should continue to act as support until violated.
The key levels for the VIX are 16.41 on the upside and 14.84 on the downside.
A break above or below either one should signal the VIX will continue in that direction.
SPX:
Major level: 2,968.80
Minor level: 2,949.25
Minor level: 2,910.15 **
Major level: 2,890.60 < < HIT
Minor level: 2,871.08 **
Minor level: 2,832.03
Major level: 2,812.50
Minor level: 2,792.98
Minor level: 2,753.93
Major level: 2,734.40
Minor level: 2,714.88
Minor level: 2,675.83
Major level: 2,656.30
Minor support should be at 2,880.90. And of course, watch the major 2,890.60 level.
If the market does break under 2,880.90, I would expect a drop to 2,856.
Technical support should be in the 2,840 area.
QQQ:
Major level: 193.75
Minor level: 192.19
Minor level: 189.06
Major level: 187.50 <
Minor level: 185.94
Minor level: 182.81 **
Major level: 181.25 <<
Minor level: 179.69
Minor level: 176.56
Major level: 175.00
Minor level: 173.44
Minor level: 170.31
Major level: 168.75
Minor level: 167.19
The QQQ closed at 183.40. At this point, the objective is to 187.50.
I would not expect a pullback to drop under 179.69.
181.25 should now be support. And 178.13 should offer strong support.
Technical support is at 178.
IWM:
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 151.30. The IWM will still need two closes above 151.56 to move up to 156.25.
But, the IWM will still need to contend with clearing the midband, which is 155.71.
150 should be strong support. And a move above the minor 153.13 level I would expect the IWM to head higher.
TLT:
Major level: 134.38
Minor level: 133.60
Minor level: 132.03
Major level: 131.25
Minor level: 130.47 **
Minor level: 128.91
Major level: 128.13
Minor level: 127.74
Minor level: 126.95
Major level: 126.56
Minor level: 126.17
Minor level: 125.39
Major level: 125.00
The TLT closed out at 130.58. The TLT will still need two closes under 130.47 to test 128.13.
The TLT did close under the upper band on the daily chart. This level should now be resistance. Look for an alert to follow.
129.69 is minor support. And 132.03 should be resistance.
GLD:
Major level: 128.13
Minor level: 127.74
Minor level: 126.95
Major level: 126.56 << HIT
Minor level: 126.17
Minor level: 125.39
Major level: 125.00 <
Minor level: 124.22
Minor level: 122.66
Major level: 121.88
Minor level: 121.49
Minor level: 120.70
Major level: 120.31
The GLD closed at 125.18. The low for the day was 124.88, or 12 cents under the major 125 level.
The GLD will need to hold the 125 level to move back up.
125 should offer support, so if the GLD breaks under it, I would expect more movement to the downside. If this should happen, watch the 123.44 level.
Two closes under 123.44 would suggest a drop to 119.
XLE:
Major level: 65.63
Minor level: 64.85
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: 55.47
Minor level: 53.91
Major level: 53.91
The XLE closed at 61.57. The XLE should test 62.50. And yesterday's high came to within 31 cents of it.
Look for 60.94 to offer support as well.
The trend is still bearish, so if the XLE cannot clear 62.50, I would expect a pullback. 62.50 is the key at the moment.
Minor support is at 61.33.
AAPL:
Minor level: 203.13
Major level: 200.00
Minor level: 196.88
Minor level: 190.63 **
Major level: 187.50 <
Minor level: 184.38
Minor level: 178.13 **
Major level: 175.00
Minor level: 171.88
Minor level: 165.63
Major level: 162.50
Apple closed at 194.81. At this point, I do expect a test of 200.
But, watch the 193.75 level. If Apple breaks under it, it could drop down to 187.
Buy against support.
WATCH LIST:
Bullish Stocks: LMT, SHOP, MA, LLL, COST, MLM, APD, MCD, CME, SAGE, V, CB, WIX, HSY, RACE, DG, IR, FIS, LLY
Bearish Stocks: GOOGL, FANG, APC, COP, WUBA, DDS, XEC, KSS, WDC, SINA, CNQ
Be sure to check earnings release dates.
