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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AGNC Short March 13th - $13.50 Call @ $0.40
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I am beginning to sound like the old Four Tops song, "It's the Same Old Song."
The market makes some positive headway only to give it all back and more.
Yesterday, it looked like the market would actually get more than a one-day bounce.
For the day, the S & P 500 closed 143.06 points higher. The day closed at 2,529.19. This reversed almost one half of the 325 point loss from Monday.
And the daily price bar closed at 87% of the range of the daily bar.
This does suggest that yesterday's high of 2,553.93 should be violated before the low of 2,367.04.
The intra day range was 186.89, which was 133% of the daily average true range of 140.79.
And pre open, the S & P is set to open limit down again. This is the same old song. The market manages to bounce only to give those gains back, and it looks like this will happen again.
There is no doubt, these are highly unusual times.
I heard this morning that unemployment projection could be as high as 20%. Quite frankly, I think that could be low.
We are already experiencing massive disruptions in industries across the board.
Airlines and hotels are effectively out of business. Restaurants are not far behind. In my county, which has the largest number of cases in our State, restaurants are only allowed to deliver take out.
And group gatherings have been limited, along with the closure of all businesses where people tend to gather, like gyms.
Hospitals are not allowing visitors and will not perform elective surgeries.
And let's not forget about the cruise industry, which has been effectively put out of business.
And the affect on businesses are getting worse daily.
The markets are reacting like it is 1929 all over again. If you think about it, the drop to yesterday's low was 19% ... and that has been since February 19th.
What could stem this downslide?
A vaccine would certainly help. A total cure even better. Even a reduction in the number of cases would be a positive.
When you have entire industries put on hold, any positive news would be helpful.
With all the doom and gloom, here is what I am looking at.
Yesterday, the S & P did manage to close above the lower band on the 60 minute chart.
The lower band is 2,415.96. Today's projected open should be about 25 points above it.
This is the critical level for today.
If this level can hold, we could see a multi-day move.
Of course, the fact that the market broke under the lower band again tells us we should see a retest. But, heopfully, that retest is after a multi-day bounce.
The other key level is 2,513.95. This is the midband on the weekly chart and the market is fighting to hold this.
2,575.46 is lower band on the daily chart. Recouping this level would also be bullish.
Finally, tomorrow is the one-month anniversay of this drop. This would be a day that could be very telling what the next move will be.
I will review the markets on all timeframes on today's webinar. I hope you can make it.
Here are the Key Levels for the Markets:
$VIX:
Major level: 40.62
Minor level: 39.84 **
Minor level: 38.28
Major level: 37.50
Minor level: 36.72
Minor level: 35.16
Major level: 34.38
Minor level: 33.60
Minor level: 32.03
The VIX closed at 75.91. The VIX closed 6.78 points lower on the day.
Like the S & P trading under its lower band on the daily chart, the VIX continues to trade above the upper band in its daily chart.
The upper band is 41.20 and the VIX is well above it.
However, it is right at the upper band on the 60 minute chart. That price level is 78.99.
If the VIX clears this level today, expect it to go higher. This level needs to hold as resistance for the market to move higher.
S & P 500:
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: 2,929.75
Minor level: 2,851.65
Major level: 2,812.50
Minor level: 2,773.45
Minor level: 2,695.35 **
Major level: 2,656.30 <
Minor level: 2,617.25
Minor level: 2,539.06
Major level: 2,500.00
Minor level: 2,460.95
Minor level: 2,382.85
Major level: 2,304.75
Minor level: 2,226.65
The S & P closed at 2,529.19. At this point, watch the minor 2,460.95 level.
The S &P should open below it. And it would then be resistance on a rally.
On the downside, the key level is 2,382.
2,415.96 is the lower band on the 60 minute chart. Watch to see if the S & P can hold the lower band. If it can't, expect more selling.
The violation of the lower band tells us that selling is not over.
QQQ:
Minor level: 214.87
Minor level: 213.30
Major level: 212.50
Minor level: 211.72 **
Minor level: 210.16
Major level: 209.38 <
Minor level: 208.60
Minor level: 207.03
Major level: 206.25
Minor level: 205.47
Minor level: 203.91
Major level: 203.13
Minor level: 202.35
Minor level: 202.35
Major level: 200.00
The QQQ closed at 182.14. The QQQ broke under the midband, which is 195.57. This level should now be resistance.
This now paves the way for a move to the lower band, which is 156.21.
The lower band on the 60 minute is 173.34. Watch this level today.
IWM:
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: 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 108.37. The IWM managed to close 4.75 higher on the day.
But, it is still trading well below the lower band on the daily chart, which is 131.53.
The IWM continues to be the most oversold market.
The lower band on the 60 minute chart is 105.14. And the IWM is just above this level. If this cannot hold, look for more selling.
TLT:
Major level: 159.38
Minor level: 158.60
Minor level: 157.03 **
Major level: 156.25 <
Minor level: 155.48
Minor level: 153.91
Major level: 153.13
Minor level: 152.35
Minor level: 150.78
Major level: 150.00
Minor level: 149.22
Minor level: 147.66
Major level: 146.88
The TLT closed at 152.98. The TLT broke and closed under the upper band on the daily chart, which is 160.56. The TLT closed 10.93 lower on the day.
The upper band should now be resistance.
173.02 is the upper band on the 60 minute chart and should be resistance.
150 should offer support.
GLD:
Major level: 159.38
Minor level: 158.60
Minor level: 157.03
Major level: 156.25
Minor level: 155.47 **
Minor level: 153.91 **
Major level: 153.13
Minor level: 152.35
Minor level: 150.78
Major level: 150.00
Minor level: 149.22
Minor level: 147.67
Major level: 146.89
Minor level: 146.11
The GLD closed at 143.56. The GLD stopped right at the midband on the daily chart. That level is 136.83 and should be support until it is violated.
150 should now be resistance and 140 support.
XLE:
Major level: 56.25
Minor level: 55.47
Minor level: 53.90
Major level: 53.12
Minor level: 52.34
Minor level: 50.78
Major level: 50.00
Minor level: 49.22
Minor level: 47.65
Major level: 46.88
Minor level: 46.09 **
Minor level: 44.53
Major level: 43.75 <
The XLE closed at 28. The XLE is still well below the lower band on the daily chart. The lower band is now 42.67 and the XLE is about 15 points under it.
25.09 is the lower band on the 60 minute chart. And the XLE actually closed above it. Watch to see if this level holds.
AAPL:
Major level: 325.00
Minor level: 321.88
Minor level: 315.63
Major level: 312.50
Minor level: 309.38
Minor level: 303.13
Major level: 300.00
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
Apple closed at 252.86. Apple closed $10.65 higher yesterday.
Apple is still trading above the midband on its daily chart. That level is 235.10 and Apple is still trading above it. This should be support unless it is violated.
Apple is trading just above the lower band on its 60 minute chart. That level is 240.18 Watch this level today for support.
WATCH LIST:
Bullish Stocks: MASI, ERY, TNK, LAKE, DHT
Bearish Stocks: AMZN, NFLX, AVGO, ULTA, ALGN, VRSN, MCD, PANW, HON, OLED, MMM, WDAY, CMI, WEX, WIX, PYPL
