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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Today's update is going to be rather brief and for a few reasons. The first of which is the fact that tomorrow is Thanksgiving here in the States and the markets are closed. The second reason is that the markets have an early closure on Friday.
Another reason is that today should be rather quiet in the markets with the New York traders all trying to escape early for the Holiday.
And the final reason is that the S & P has hit our target of 3,125 and had now cleared it.
Yesterday closed out at 3,140.52 or about 15 points above the major objective I have been calling for. The day closed out 6.88 points higher.
And again, the day's trading was a narrow range trading day with a range of only 11.69 points.
This now brings the daily average true range down to 20.01 points.
With all this narrow range trading, the question is when will profit-taking come in?
At thas point, I see two scenarios for the immediate future.
The first is that the S & P moves up the minor 3,164.08 level and profit-taking comes in at that level. The VIX would have to spike higher to confirm a short term top.
The second scenario is that the market blows right this level and heads up to the upper band on the daily chart.
The upper band is now 3,258.30 or about 120 points higher than yesterday's close.
The question is which scenario can we expect?
Because of where the VIX is trading, I am thinking that the first scenario is more probable.
But we know the price level to look for possible resistance and we know that the VIX should help to confirm a top.
Knowing what to look for will keep you prepared for the likely scenarios that can happen.
Pre open the S & P is trading about 4 points higher. This would put the open about two points above yesterday's high, which was 3,142.69. Watch for support at the high and the close, which was 3,140.52.
And have a great Thanksgiving!
Here are the Key Levels for the Markets:
$VIX:
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 <
Minor level: 11.72
Minor level: 10.16
Major level: 9.38
The VIX closed out at 11.54 yesterday. This was the first close under the 11.72 level.
This now suggests that if the VIX closes under 11.72 today, it should drop to 9.38.
The 13.28 level should still be resistance. And the 12.50 area as well.
Of course, a drop to 9.39 would be at historic lows which would be a key level to watch for a possible reversal.
SPX:
Minor level: 3,164.08 **
Major level: 3,125.00 < Hit
Minor level: 3,085.95 ***
Minor level: 3,007.85
Major level: 2,968.80
Minor level: 2,929.73
Minor level: 2,851.58
Major level: 2,812.50
Minor level: 2,773.45
Minor level: 2,695.35
Major level: 2,656.30
The S & P closed at 3,140.52. The S & P has now cleared and closed above the major 3,125 level. This would suggest that it should now be support.
At this point, the minor 3,134.76 level should be the key level to watch. I would now expect support there and if the S & P can close above it, I would expect the move to 3,164.
3,134 is also technical support.
QQQ:
Major level: 206.26 <
Minor level: 205.48
Minor level: 203.91 **
Major level: 203.13 HIT
Minor level: 202.35
Minor level: 200.78
Major level: 200.00
Minor level: 199.22
Minor level: 197.77
Major level: 196.88
The QQQ closed at 204.61. With a close above 203.91, the QQQ should now test 206.26.
203.91 should now be minor support.
Technical support should be around the 204 area as well.
IWM:
Major level: 168.75
Minor level: 167.19
Minor level: 164.06 **
Major level: 162.50 < HIT
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 161.69. And yesterday's high was 162.54, which you may recognize was the target we were looking for.
It did close under 162.50, so watch to see if the IWM can clear it. It will need to in order to head up to the next level.
160.94 should be support.
Technical support is around 159.
TLT:
Major level: 143.75
Minor level: 142.97
Minor level: 141.41
Major level: 140.63 <
Minor level: 139.85
Minor level: 138.28
Major level: 137.50
Minor level: 135.84
Minor level: 132.81
Major level: 131.25
The TLT closed at 141.13. The TLT closed above the major 140.63 level.
Watch the 141.41 level. Two closes above this level and the TLT should continue higher. And at this point, if the TLT can close under 139.85 today, it should drop to 137.50.
And the 139 to 140 area should still offer technical support.
GLD:
Major level: 143.75
Minor level: 142.97
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 GLD closed at 137.74. Watch the 137.50 level. If the GLD can clear it, then it should head higher. And it did close above it.
The next level is 138.28. Two closes above this level and the GLD should head up to 140.63.
The key level is 134.38 on the downside. If the GLD has two closes under this level, it could drop to 125.
Short term, there is technical resistance at 138. And technical support is around 136.
XLE:
Minor level: 63.28
Major level: 62.50
Minor level: 61.72
Minor level: 60.16
Major level: 59.38 <
Minor level: 58.60
Minor level: 57.03
Major level: 56.25
Minor level: 55.86
Minor level: 55.08
Major level: 54.69
The XLE closed at 59.34. The XLE has now closed just under the major 59.38 level. It will need to clear this level to head higher.
At this point, if the XLE has two closes above 60.16, it should move up to 62.50.
58.60 should now be support. And the 59 area should offer technical support.
AAPL:
Major level: 281.25
Minor level: 277.35
Minor level: 269.54
Major level: 265.63 HIT!
Minor level: 261.72
Minor level: 253.91
Major level: 250.00
Minor level: 246.88
Minor level: 240.63
Major level: 237.50
Apple closed at 264.29. Apple will need two closes above 269.54 to move higher.
Watch the 261.71 level on the downside. It should be support until violated.
272.49 is the upper band on the daily chart. Watch this level on the upside as well.
Technical support should be in the 264 area.
WATCH LIST:
Bullish Stocks: ROP, HUM, AVGO, A DBE, MA, NOW, PAYC, ANSS, LULU, FB, RH, VRTX, BABA, JAZZ, JPM, TGT, CTXS, DGX, ABC
Bearish Stocks: ULTA, AAP, HUBS, LOPE, FANG, BLUE, THS, ETSY, NUS
