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
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DUST Long $4.50
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Short June 20th - $15.50 call @ $.27
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CRM Long June 28th $155 Call @ $3.20
CRM Short June 28th $160 Call @ $1.00
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The S & P 500 closed marginally lower yesterday. It closed the day out at 2,913.78, down 3.60 points for the day.
The high for the day came in at 2,932.59 or about one point above the resistance level from Tuesdays daily price bar.
And the low for the day was 2,912.99 or about 3 points above the minor 2,910.15 level.
But, I do believe that the most important facts from yesterday are two-fold.
The first is that the range again contracted. The range for the day was only 19.60 points. So, yesterday contracted to 73% of the daily average range, which is now 26.99.
The second fact was that yesterday, the S & P 500 and the VIX diverged again.
They both closed to the downside. So, this was the second time in three days that they both closed to the downside.
The last time this happened was on Monday, October 15, 2018 and Wednesday, October 17, 2018.
The market primarily sold off for the next two weeks after that.
Can this happen now?
It's possible. But, I do like to look at prior events to see if there are patterns that emerge. And that is what happened the last time this occurred.
I do find it interesting that this time, the divergence happened on a Monday and Wednesday, just like the ones last October.
The S & P 500 closed again at 4% of the range of the daily bar. This does suggest once again that yesterday' low should be violated before the high.
Pre open, the S & P 500 is trading about 4 points higher. Look for a move lower and a most likely test of 2,910.15.
And to move higher, the S & P 500 will need to reclaim the support area from last week's price bar.
Support from last week's weekly price bar is in the 2,920 to 2,925 area. And with a close under the lower end, the S & P 500 will need to hold the 2,925 area to head higher.
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 Friday at 16.18. The VIX closed again under the minor 16.41 level. 16.41 also just happens to be the midband on the daily chart.
Watch to see how the VIX reacts today around the minor level and the midband.
I am still biased for a move down in the VIX.
To move up to 18.75, the VIX will need two closes above 16.41. but, it is still resistance until violated.
On the downside, minor support is at 14.84.
12.50 is still the downside objective.
SPX:
Major level: 2,968.80 <
Minor level: 2,949.25
Minor level: 2,910.15 **
Major level: 2,890.60 <
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
Looking for the active objective of 2,968.80 level, to be hit.
The S & P 500 is trading above the support level at 2,900.40. There is also technical support in this area.
I am still biased for the S & P 500 to clear the major 2,968.80 and if it can, a move up to 3,095 is possible.
I don't see a break down in the markets. The S & P 500 may trade between the 2,968 and 2,812 levels before taking out either side.
Short term charts remain bullish.
Technical support should be at 2,920.
QQQ:
Major level: 193.75
Minor level: 192.19
Minor level: 189.06 **
Major level: 187.50 < Hit
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 185.79. A test of 181 is possible at this point. But if the QQQ can recoup the 185.94 level, it should head back up.
184.38 is also a support level.
Minor support should be at 187.89. And major support at 187.50.
Like the S & P 500, short term charts remain bullish.
Technical support should be at 182.
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 150.80. The IWM continues to move away from the midband, which is now 154.62.
The IWM, will, of course, have to clear this level to move higher.
The IWM is now within 76 cents of the major 150 level. If 150 cannot hold as support, a drop to 144 is possible.
But, 150 should be strong support.
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 131.97. For the day, it was down $0.85.
The TLT broke from the upper band. Looks like the expected pullback is starting.
131.64 should offer support.
Getting interested in a hedged straddle position.
GLD:
Major level: 134.48
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
Minor level: 124.22
Minor level: 122.66
The GLD closed at 132.97. The GLD sold off but is still above the upper band on the daily chart. The upper band is now 130.97.
I mentioned yesterday how it looked like they are pulling in all the suckers and the GLD sells off.
I would not be a buyer above the upper band.
A close today under 133.60 and the GLD should drop to 131.25.
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
The XLE closed at 63.45. This now suggests that if the XLE can close above 63.28 today, it should move up to 65.63.
There is resistance right at 63.62. So, if the XLE can clear this level, I would expect it to move higher.
Technical support is at 63.
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 199.80. Apple continues to try and clear 200.
200 is a key level for Apple. If it does take out 200, it should move up to 250.
Technical support is at 196. The 60 minute chart has crossed into an uptrend. Continue to look to buy at support.
WATCH LIST:
Bullish Stocks: BA, LMT, SHOP, NOC, ADBE, SPY, NOW, MLM, WDAY, HD, ZBRA, CME, EW, CMI, DATA, V, DE, WIX
Bearish Stocks: ALGN, BLUE, AMTD, FIZZ, TWTR, WES, BGSPRGO, AMTD
Be sure to check earnings release dates.
