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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The S & P 500 got a bounce yesterday. The S & P closed 26.34 points higher. It closed the day out at 2,919.40.
From a technical standpoint, the issue we were looking for was the retest bottom on the 30 minute chart was in.
As you know, the S & P took out the lower band on the 30 minute chart and we were looking for a drop back to the lower band or just above it.
On Tuesday, the S & P dropped down to above the lower band and yesterday saw the market follow through to the upside.
But, the day did not close strongly. It only closed at 55% of the range of the daily bar.
This does not show strong conviction. A close towards the higher end of the daily bar would indicate a follow-through to the upside.
But with a close percentage around the midpoint of the bar, the momentum may still be to the downside.
The support area from yesterday's daily bar is in the 2,915 to 2,918 area.
This is the area to watch for today.
The other key levels for today are the levels from last week's weekly price bar, which is around 2,904. And the upper end of the weekly resistance level is the 2,924 area.
If we look at the resistance levels, the S & P did close under the minor 2,929.73 level for the second day. This now implies that resistance should be at this level.
Pre open, the S & P is trading 6 points lower. Watch the close, which was 2,919.40, for possible resistance and the low, which was 2,907.41, for possible support.
A break of the low would indicate the market should continue lower.
This market continues to trade off news of a trade deal. This creates these violent swings.
Here are the Key Levels for the Markets:
$VIX:
Major level: 25.00
Minor level: 24.22
Minor level: 22.66
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
The VIX closed at 18.69 yesterday. The VIX closed under the 18.75 level.
To move lower, the VIX will need to drop under 17.97. Watch this level today.
On the upside, 19.53 is the resistance level and the VIX will need to clear this level to head higher.
Technical support on the VIX is at 18.19. A break under this level and expect the VIX to head lower.
SPX:
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: 2,929.73 **
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 2,919.40. With a close under 2,929.73, resistance should be at this level. And the downside target should be to the 2,812 level.
Technical resistance is around 2,936.
2,854 is the lower band.
QQQ:
Major level: 196.88
Minor level: 196.10
Minor level: 194.53
Major level: 193.75
Minor level: 192.19
Minor level: 189.06
Major level: 187.50
Minor level: 185.94 **
Minor level: 182.81
Major level: 181.25
Minor level: 179.69
The QQQ closed at 187.23. The major 187.50 level should be resistance. If the QQQ can clear 187.50, it should head higher.
The QQQ is sitting right at a strong technical support level, which is 187.27. A break under this level and it should be resistance.
The key level on the downside is 185.94. Watch to see if it holds as support.
IWM:
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 147.13. The lower band on the 30 minute chart for the IWM is 142.55.
At this point, I would expect resistance at 148.44. And a drop to 144 is highly probable.
TLT:
Major level: 150.00
Minor level: 148.44
Minor level: 145.31 **
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
The TLT closed at 144.35. Support should be at 143.75. A break under this level and it should head lower.
On the upside, watch the 144.53 level. It will need to clear this level to head higher.
GLD:
Major level: 150.00
Minor level: 148.44
Minor level: 145.31
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
The GLD closed at 142.05. The objective should be to 143.75.
142.19 should be minor resistance. The GLD will need to clear this level to move higher.
Technical support should be at 141.
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 56.41. It did mange to barely close above the major 56.25 level. It will need to hold this level to move higher. If it can't, look for a move lower.
Two closes under 55.47 and the XLE should head lower. And two closes above 57.03 and the XLE should move higher.
AAPL:
Major level: 237.50
Minor level: 234.38
Minor level: 228.13
Major level: 225.00 <
Minor level: 221.88
Minor level: 215.63
Major level: 212.50
Minor level: 209.38
Minor level: 203.13
Major level: 200.00
Minor level: 196.88
Apple closed at 227.03. Apple managed to close back above 225. The minor 227.13 level is the key level on the upside. Two closes above this level and Apple should head higher.
The 225 area should continue to offer support. On the upside 231.25 is resistance, so if Apple clears this level, it should head higher.
Short term charts remain bullish.
WATCH LIST:
Bullish Stocks: AGN, EXPE, DLR, SPLK, EDU, WPC, PAYX, MTH, CMS, LEN, MDCO, TSM
Bearish Stocks: HUM, CLX, JAZZ, LLY, FANG, PLCE, BMRN, WUBA, KFY, AMTD, TDC, TLRY, ALKS
Be sure to check earnings release dates.
