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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I suggested closing the SPY straddle yesterday, after one day. The overnight return worked out to 27%.
The market continued to follow through to the downside yesterday.
The S & P 500 closed 50.12 points lower for the day. The market closed at 2,820.
The day closed at 33% of the range of the daily price bar. This does suggest that yesterday's low of 2,793.15, should be violated before the high of 2,874.14.
The range for the day was 80.99 points. This exceeded the daily average true range by about 6 points. The average true range is now 74.17.
Pre open, the S & P is trading about 34 points lower.
This projects to an open around 2,786 or about 7 points below yesterday's low.
So, the close percentage projection should be met right at the open.
The question now is where should the market firm up and find support?
The projected open should put the market under the lower band on the 10 minute chart. And the 60 minute chart is still bullish.
The lower band level is 2,798.
At a minimum, you want to see the S & P move above 2,798 and find support at that level for a bounce to happen.
The next level of support is around 2,750, which is the midband on the 60 minute chart.
This should be a support level as the marker approaches it. If it is violated, it would indicate the market should move lower.
And finally, the VIX should help us to determine if the market will reverse. The VIX did rally back to the 37.50 level and could not close above it.
If the VIX clears 37.50, it should move higher. If it can't clear 37.50, it should drop and the market should reverse to the upside.
Resistance from yesterday's daily bar is in the 2,834 to 2,842 area.
BABA reports today before the close. And WIX also reports Thursday before the close.
Here are the Key Levels for the Markets:
$VIX:
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
Major level: 31.25
Minor level: 30.47
Minor level: 28.91
Major level: 28.13
Minor level: 27.35
Minor level: 25.78
Major level: 25.00
The VIX closed at 35.28. The VIX jumped almost 7% yesterday.
If the VIX closes above 34.38 today, it should test 37.50. As I said above, 37.50 should be a key level for the VIX today.
There is also technical resistance right at the 37.50 level. So watch this level today.
S & P 500:
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
The S & P closed at 2,820. The S & P did drop under the major 2,812.50 level, but managed to close above it.
This should be a level tested today. Watch to see how the market reacts at this level. It should be support.
Technical resistance is around 2,798.
QQQ:
Major level: 231.22
Minor level: 229.66
Minor level: 226.56
Major level: 225.00
Minor level: 223.42 **
Minor level: 220.31
Major level: 218.75 <
Minor level: 217.19
Minor level: 214.06
Major level: 212.50
Minor level: 210.93
Minor level: 207.81
Major level: 206.25
Minor level: 204.69
Minor level: 201.56
The QQQ closed at 219.34. The QQQ sold off 2.78 points.
The QQQ traded under the major 218.75 level, but managed to close above it. At this point, I would expect support at 217.19. If the QQQ cannot hold this level, it should then drop lower.
Technical support as around 215.
IWM:
Major level: 150.00
Minor level: 148.44
Minor level: 145.31
Major level: 143.75
Minor level: 142.19
Minor level: 139.06
Major level: 137.50
Minor level: 135.94
Minor level: 132.81
Major level: 131.25
Minor level: 129.69 **
Minor level: 126.56
Major level: 125.00
Minor level: 123.44
The IWM closed at 122.72. If the IWM closes under 123.44 today, it should continue lower.
Technical support is around 120. Similar to the S & P and the QQQ. The IWM is still bullish on the 60 minute chart, so I do expect support to come in.
TLT:
Major level: 168.75
Minor level: 167.97
Minor level: 166.41
Major level: 165.63
Minor level: 164.85
Minor level: 163.28 **
Major level: 162.50
Minor level: 161.72
Minor level: 160.16
Major level: 159.38
Minor level: 158.60
Minor level: 157.03
Major level: 156.25
Minor level: 155.48
The TLT closed at 165.52. The TLT did test 165.63 and closed just under it.
Watch the major 165.63 level today. It would need to clear this level to head higher.
The 167 area should be technical resistance. If needs to clear this level to head higher. And if it does, it should continue higher.
GLD:
Major level: 165.63
Minor level: 164.85
Minor level: 163.28
Major level: 162.50
Minor level: 161.72
Minor level: 160.16 **
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
The GLD closed at 161.58. The next minor level on the upside is 160.16. And on the downside, the level is 158.60. The GLD still needs to close above 160.16 today to move up to 162.50.
Technical resistance is around 163.
The 160 area is technical support.
XLE:
Minor level: 47.65
Major level: 46.88
Minor level: 46.09
Minor level: 44.53
Major level: 43.75
Minor level: 42.97
Minor level: 41.41
Major level: 40.63
Minor level: 39.83
Minor level: 38.28
Major level: 37.50 <
Minor level: 36.72
Minor level: 35.15
Major level: 34.27
The XLE closed at 35.73. A close today under 36.72 and the XLE should drop to 34.
Technical support should be around 33. And resistance at the 38 level.
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
Apple closed at 307.65. Watch the 309.38 level now on the upside.
The major 300 level should be support.
The 290 area should offer technical support. And technical resistance is around 313.
WATCH LIST:
Bullish Stocks: GOOGL, SHOP. CHTR, DXCM, NOW, ADBE, NVDA, AAPL, RNG, AAPL, ZBRA, CLX, COUP, AGN, MSFT, ADSK, CRM
Bearish Stocks: WBA, PINC, LX, RESI, LC
