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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Yesterday, the markets had their first bearish close after five consecutive higher bullish closes.
The S & P 500 ended up closing down 22.50 points. And yesterday's close reversed the five prior bullish closes. This sets up a scenario where the midpoint of yesterday's daily bar should act as resistance. That level is 1,987.15.
This morning, it appears that the markets should open higher. The DJIA is up over 1 point and the SPY is up about 1.21 pre open.
Based on the pre market, watch how the S & P 500 opens relative to 1,987.15. If it opens above it, that level should act as support. An open below and it should be resistance.
I mentioned yesterday that 18.75 should be a resistance level for the VIX. The VIX hit a high of 18.79 yesterday before pulling back and closing at 18.67.
18.75 should still act as a resistance level.
As the VIX sells off, the markets should head higher.
Today at 12:00 EST is our bi-monthly webinar. If there is any specific topic you would like me to cover, please send me an email at davismdt@gmail.com and I will try to incorporate it in the webinar.
Here are the key levels for the markets.
VIX:
Major level - 25.00
Minor level - 23.44
Minor level - 21.88 **
Minor level - 20.31
Major level - 18.75
Minor level - 17.19 *
Minor level - 14.06
Major level - 12.50
As I mentioned before, the VIX closed just under the 18.75 level yesterday. 18.75 should act as resistance. If it is violated, I would expect that 20.31 should also act as resistance.
Two closes under 17.19 and the objective is to 12.50.
S & P 500 Cash Index:
Major level - 2,062.50
Minor level - 2,046.88
Minor level - 2,015.62 *
Major level - 2,000.00
Minor level - 1,984.38 *
Minor level - 1,953.12
Major level - 1,937.50
Minor level - 1,921.88
Minor level - 1,890.62
Major level - 1,875.00
After stalling at the major 2,000 level, the S & P closed at 1,979.26. If it closes today under 1,984.38, the downside objective becomes 1,937.50.
The 60 minute chart is firmly in an uptrend, so expect support to come in at lower levels on a pullback. 1,942 is the 200 day ema on the 60 minute chart.
Nasd 100 (QQQ):
Major level - 112.50
Minor level - 111.71
Minor level - 107.03 *
Major level - 106.25
Minor level - 105.46 *
Minor level - 103.91
Major level - 103.13 *
Minor level - 102.35
Minor level - 100.78
Major level - 100.00
103.13 should be the objective for the QQQ. 102.35 should act as support if 103.13 is violated.
Like the S & P 500, the short term 60 minute chart is in an uptrend.? Support should be around 102 to 103 for the QQQ.
TLT:
Major level - 134.38
Minor level - 133.60
Minor level - 132.03
Major level - 131.25
Minor level - 130.46
Minor level - 128.91*
Major level - 128.13 *
Major level - 125.00
The TLT popped up and closed at 129.98 yesterday. A close today above 128.91 and the objective should be to 131.25.
Lower levels should act as support.
GLD:
Major level - 125.00
Major level - 121.88 *
Minor level - 121.10
Minor level - 119.53 *
Major level - 118.75
Minor level - 117.96
Minor level - 116.41
Major level - 115.63
Yesterday's high was exactly 121.88, before profit taking set in. The GLD closed at 120.58 yesterday. A close today under 121.10 and the objective becomes 118.75.
Let's see if this starts the pullback I have been looking for.
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
The XLE closed at 59.77 yesterday. A close today under 61.72 and the objective should be to 59.38.? I would not expect a move below 56.25 at this point.
Apple:
Major levels for Apple are 112.50, 106.25, 100, 93.75, and 87.50.
100 should be support on Apple. If the price starts to firm up around 100, expect a move back up to 106.
Watch list:
Bullish Stocks: PNRA, BCR, KMB, TFX, JNJ, SAFM, K, TJX, GIS, MO, RAI, VZ, FAST, CAG
Bearish Stocks: VRX, ANAC, CERN, BCOR, CBR, PPHM, OREX
Be sure to check earnings release dates.
