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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The S & P 500 continues to trade in a narrow range.? For the day, it closed 2.46 points to the downside.? And had a range of only 11.43 points ?
The ATR is now 13.58 points, so the range for the day contracted again. ?
The high for the day was 2,403.87.? Which puts is within 2.50 points? our 2,406.30 objective.
With the market set to open slightly lower, look for lower levels to offer support for the move up to the objective.
The last two days, the low for the day was 2,393.92 and 2,392.44, respectively. As I mentioned the past two days, support from last week's weekly price bar should be in the 2,390 to 2,394 area.
This area should continue to offer support until it is violated to the downside.
Yesterday I tried to convey how to read the levels for the S & P 500, which of course, is a bullish market.
Today, I will use a market that has been bearish, which is the FXY.
When you look at a daily chart for the FXY, you notice that the 200 ema is below the 253 day average.? And they are spreading further away from each other.? This immediately tells you it is in a downtrend.? Nothing fancy or magical there.
At this point, you would look at the levels and expect them to offer resistance.
For the FXY, the major 89.06 level was tested in the middle of April.? This also was just below the 253 sma or midband on the daily chart.? The actual pivot high was 88.90 or 16 cents under the 89.06 level.
The question at that point was how far should the FXY drop?
Usually the market will move 3 levels in the direction of the trend. In the case of the FXY, that would mean a drop down to the 84.38 level.
And guess what yesterday's low was?? 84.23.
Objective achieved.
Does that mean the market should reverse?? Not necessarily.? But it puts you on alert that a bounce could be expected.
If you were short, you would use a tight stop at this point.
Hope this helps to explain the levels. If you do have any questions, feel free to email directly and I will do my best to provide an answer,? My direct email is davismdt@gmail.com.
Here are the Key Levels for the Markets:
$VIX:
Minor level: 14.45
Major level: 14.06
Minor level: 13.67
Minor level: 12.89
Major level: 12.50
Minor level: 12.11
Minor level: 11.33
Major level: 10.94 <
Minor level: 10.55 <
Minor level:? 9.77
Major level:? 9.38 Strong support
The VIX closed slightly to the up.side, at 9.96.? The low for the day was 9.56, just 18 cents above the major 9.38 level.
Close enough to say it was hit.? A violation of 9.38 would inside the VIX should head lower.
Downside support should be at 8.98.? 10.16 should be resistance.
$SPX:
Major level: 2,406.30 <
Minor level: 2,398.48 **
Minor level: 2,382.82
Major level: 2,375.00
Minor level: 2,367.20
Minor level: 2,351.60
Major level: 2,343.80
Minor level: 2,335.98
Objective is still to 2,406.30.
2,390.60 and 2,398.40 should offer support now.
On the upside, 2,402.30 is a minor resistance level.
QQQ: ?
Major level: 140.63
Minor level: 139.85
Minor level: 138.28 **
Major level: 137.50 <
Minor level: 136.72
Minor level: 135.16
Major level: 134.38
Minor level: 133.60
The QQQ closed above 138.28, at 138.32.? A close today above 138.32 would imply a move up to 140.63.
138.67 is a minor resistance level.? And 137.89 should offer major support.
IWM:
Minor level: 141.41
Major level: 140.63
Minor level: 139.85
Minor level: 138.28 ***
Major level: 137.50 <
Minor level: 136.72
Minor level: 135.16
Major level: 134.38
The IWM had a second close above 138.28.? The objective should now be back up to 140.63.
138.28 should offer support. 139.06 could offer minor resistance.
TLT: ?
Major level: 125.00
Minor level: 124.22
Minor level: 122.66
Major level: 121.88
Minor level: 121.09 **
Minor level: 119.53
Major level: 118.75 <
Minor level: 117.96 ?
The TLT closed under 121.09 yesterday.? The objective should be down to? 118.75.
The 60 minute chart has moved into a downtrend.
120.12 should be minor support ad 121.09 resistance.
GLD: ?
Major level: 125.00
Minor level: 124.22
Minor level: 122.66
Major level: 121.88
Minor level: 120.32
Minor level: 119.53
Major level: 118.75 <
Minor level: 117.97
Minor level: 116.41
Major level: 115.63 <
The GLD hit 115.56, hitting our objective of 115.63.
114.06 should be minor support.? A bounce from its oversold condition would be expected.
XLE:
Major level: 75.00
Minor level: 74.22
Minor level: 72.66
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
68.75 should be tested.? And the XLE held above 66.41, which should be support.
67.19 is a minor support level.? A break under 67.19 and expect the XLE to drop. ?
FXY:
Major level: 89.06
Minor level: 88.67
Minor level: 87.89
Major level: 87.50
Minor level: 87.11
Minor level: 86.33
Major level: 85.94 ?
Minor level: 85.55
Minor level: 84.77
Major level: 84.38 <
The FXY is right at the 84.38 level.? I would expect a bounce at this level.? However, if it breaks under 84.38, expect the FXY to head lower.
85.16 should be minor resistance.? And 83.59 should be minor support.
AAPL:
Major levels for Apple are 162.50, 156.25, 150, 143.75, and 137.50
The next objective is to 156.25.? 151.56 should be minor support.? And 159.38 should be minor resistance.
WATCH LIST:
Bullish Stocks: PCLN, GOOGL, REGN, NOC, HUM, MMM, GD, AET, ALGN, ADBE, RCL, SWKS, KLAC, CBOE, CCL, CTSH, SSYS, BBRY
Bearish Stocks: FLT, SJM, ATHN, THS, DVA, TCO, OXY, CLR, EDR, BSFT
Be sure to check earnings release dates.
