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 - $1.65
RRC Long at $11.85
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RIG Long at $8.81
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FEYE Long at $17.18
Total Premium Collected $0.30
FCX Long at $12.74
FCX Short March 15th - $13 Call @ $0.24
AMC Long at $14.44
AMC Short March 22nd - $14.50 Call @ $0.43
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The market continued to tick higher yesterday, closing 19.40 points to the upside. The
S & P 500 closed the day at 2,810.92.
Of course, with this close, our upside objective of 2,812.50 was hit. And was actually taken out. The high for the day was 2,821.24, before pulling back to close just under our objective.
I actually looked at some intra day charts after our webinar yesterday and for about an hour, the market literally sat on our line.
But, it did take out the key level of 2,812.50.
This is now the fourth time the S & P 500 reached the major 2,812.50 level. The question now is where does it go from here?
First off, we know the conditions for the market to continue higher. That is simple. It would require two closes above 2,832.03 for the S & P 500 to move up to 2,890.60.
And 2,832.03 would be the level to watch on the upside for a possible failure.
Second, the VIX is approaching its historic low. This does put us on alert that a pullback could be in the short term future. But, we need a reversal to the upside on the VIX to confirm that.
The final comment I have is this. The last three times the S & P 500 approached 2,812.50, it could not close above it.
I am not including the recent rallies to this level on 2/25 and 3/4. I am referring to the three attempts back in October, November, and December of 2018.
All three rally attempts failed to close above 2,812.50. The attempt on October 17th came the closest, ending the day at 2,809.21, after moving slightly above it.
This is a little nuance worth paying attention to.
And I would expect the same thing now. That is, if the S & P 500 cannot close above the 2,812.50 level, a pullback could be coming.
A close above this level does indicate that it should head higher and that a selloff would be short-lived. But, that is getting ahead of ourselves.
I think the take away from this move has been that the resistance levels and chart interpretations I have shared during this bull move have been, for the most part, quite accurate.
If I am wrong, feel free to email me and tell me.
I guess I can toot my own horn once in a while. Though this has never been my style, I do recognize that there are very few people on this planet who share the price levels I do and how they can confirm the continuation of a move. Or the failure of a move.
In fact, just a week or two ago, all the talking heads and pundits were discussing how this market was ripe for a pullback and that this bull market is way overextended.
Though I do believe the bull market is overextended in time, I said that I don't think the conditions are in place for a pullback ... just yet.
The support area from yesterday's daily price bar is in the 2,805 to 2,810 area.
The high of last week's weekly price was tested and exceeded. The issue now is to see if the market can close above it. That price is 2,816.88 and should no doubt be monitored.
I did say yesterday that last week's high would be tested.
A close above this price would be extremely bullish.
Pre open, the S & P 500 is down about 4 points.
This afternoon we get earnings from ADBE, ULTA, and AVGO.
Here are the Key Levels for the Markets:
$VIX:
Minor level: 22.66
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
The VIX closed out at 13.44 yesterday. The VIX is inching closer to the 12.50 level. The low for the day was 13.25, within 75 cents of the level.
At this point, resistance should be at 14.06. And I would expect resistance at 14.84 as well. The VIX should not exceed 14.84. If it does, it could mean the VIX is bottoming.
SPX:
Major level: 2,890.60
Minor level: 2,871.08
Minor level: 2,832.03 **
Major level: 2,812.50 Hit
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 level: 2,636.75
Minor level: 2,597.65
The 2,812.50 objective was hit and exceeded. At this point, the minor 2,792.98 level should be support. And the market will need two closes above 2,832 to move higher.
And as I said above, the short term key is to see if the S & P 500 can close above the 2.812.50 level.
The 30 minute chart is moving closer to crossing into an uptrend. If it can do that, I would expect more movement to the upside.
QQQ:
Major level: 181.25
Minor level: 179.69
Minor level: 176.56 **
Major level: 175.00 < Hit!!!
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
The QQQ closed at 177.01. This was the first close above the minor 176.56 level. A close above it today would imply a move up 181.25.
At this point, support should be at 176.56 and 175.00.
The 30 minute chart has moved into an uptrend. Technical support should be at 173.
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
The IWM closed at 154.98. It continues to trade just under the midband on the daily chart. The midband is 156.37 and yesterday's high was 155.73.
Will it clear this level?
I suspect it will because all the other major markets have. But, until it does, it is resistance.
153.13 should be support.
TLT:
Major level: 123.44
Minor level: 123.05
Minor level: 122.27
Major level: 121.88 <
Minor level: 121.49
Minor level: 120.70
Major level: 120.31
Minor level: 119.92
Minor level: 118.14
Major level: 118.75
Minor level: 118.36
Minor level: 117.58
The TLT closed at 121.83. At this point, the TLT needs to clear 121.88 to move higher.
Minor resistance is at 122.27.
The 30 minute chart just crossed into an uptrend. Technical support is at 121.
GLD:
Major level: 126.56
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: 121.10
Minor level: 119.53
Major level: 120.31
Minor level: 119.92
Minor level: 119.14
Major level: 118.75
The GLD closed at 123.84. Upside objective should be to 125.
125 should be a critical level for the GLD. How the GLD reacts at this level would tell us the direction of the next minor move.
The 30 minute chart is bearish. And technical resistance should be at 123.82.
XLE:
Major level: 71.88
Minor level: 71.10
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
Minor level: 60.16
Major level: 59.38
The XLE closed at 65.98. First close above 65.63. This level should be support.
The next minor level is 66.41. Two closes above this level and the XLE should test 68.75.
Technical support is at 65.62.
FXY:
Major level: 89.84
Minor level: 89.65
Minor level: 89.26
Major level: 89.06
Minor level: 88.87
Minor level: 88.48
Major level: 88.28
Major level: 87.50
Major level: 86.72
Major level: 85.94 <
Minor level: 85.75
Minor level: 85.36 ***
Major level: 85.16
Minor level: 84.97
The FXY closed at 85.86. At this point, the FXY should test 85.94.
The 85.64 level should offer support. If it doesn't, I would expect 85.55 to hold.
AAPL:
Major level: 187.50
Minor level: 184.38
Minor level: 178.13 **
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: 159.38
Minor level: 153.13
Major level: 150.00
Predicted High: 183.56
Predicted Low: 179.86
Apple closed at 181.71. At this point, I am biased for a test of 187.50. But, the caveat at the moment is that the daily midband is 186.04. And that should be resistance until it is violated.
Apple is just under the midband. Watch to see if it can clear it. If it can, I would expect this move to continue.
175 should be major support. And minor support should be at 176.56. And 181.25 could offer some resistance.
WATCH LIST:
Bullish Stocks: COST, ZBRA, APD, CMI, CCI, DIS, YUM, CNI, DUK, ROKU, ORCL, SO, LNT, BCE, AGO
Bearish Stocks: NFLX, HUM, GD, SJM, CTS, FANG, INGR, STMP, HAS, EOG, VLO
Be sure to check earnings release dates.
