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 contracted once again after a day in which the market almost ran to its daily average true range.
The market closed to the downside by 5.99 points. It closed out the day at 2,989.69.
And the day ended up with a range of only 12.34 points. With a daily average true range of 33.86 points, yesterday's range was only 36% of the average.
It also qualified as an inside day with a lower high and higher low.
This all adds up to a contraction, which should eventually lead to an expansion.
And pre open, the S & P is trading about 12 points higher. Assuming this trading holds up until the open, the market should open around 3,002 or about 4 points above yesterday's high.
This would suggest that the high of 2,997.54 should be support. If the high does not hold, I would expect strong support around 2,990.
The key level on the upside will be the minor 3,007.85 level.
As you know, the S & P will need two closes above this level to move higher. However, it should be resistance until it is violated.
Another key at the moment is that the S & P is trading above the high from last week.
The high was 2,993.28 and the projected open should put the market above this level.
Watch this level as well today.
NFLX reported last night and is trading about $22 higher off their earnings. IBM also reported and is down about $8 off their earnings.
Next week there will be a lot of S & P companies reporting.
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 13.68 yesterday. This put the VIX within 1 point of the major 12.50 level, which should be the objective.
As you know, the 12.50 area is a key long term support level for the VIX and a bounce usually happens. Monitor this level closely.
14.06 should be minor resistance. Technical resistance is around 16.
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 2,989.69. At this point, the S & P will need two closes above 3,007.85 to move up to 3,125. As I mentioned above, this should be resistance until it is cleared.
2,983 should be a support level.
The 2,960 area should offer technical support.
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 193.04. Like the S & P, the QQQ had an inside day and contracted.
And the QQQ will need two closes above 194.53 to move up to 196.88.
192.58 should offer support. And 190.63 should also be support.
Technical support should be at around 191.
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 151.55. The IWM closed one cent under the 151.56 level. It will need two closes above this level to head up to 156.
Expect support at 150 at this point.
The next minor level on the upside is 151.56. Two closes above this level and the IWM should move up to 156.
150.78 should offer minor support.
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 139.92. Watch to see if the TLT can hold the minor 139.85 level today. If it can, I would expect a bounce up to 141.
The TLT is overosld in the short term. And I would not expect a drop under 139.06. If it does, the TLT should head lower.
140.63 should now be resistance. And the 143 area should offer technical resistance.
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 140.41. With the GLD reclaiming 139.85, it will still need two closes under 139.85 to move lower.
Technical resistance should be in the 141 area. And the major 140.63 level should offer resistance. Biased to the downside.
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 57.29. The XLE held above 57.03. Watch to see if this holds. If it does, the XLE should move up to 59.
But, the 59 area should be technical resistance. So, if the XLE can clear 59, it should head higher.
57.42 is a key short term level. If the XLE closed under it today, I would expect a drop to 56.
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 234.37. Apple closed one cent under the 234.38 level. This now implies that if Apple closes under it today, a drop to 225 would be expected.
But, there is support at 228.13. And if Apple can reclaim 234.48 I would expect Apple to move higher.
Short term charts remain bullish.
WATCH LIST:
Bullish Stocks: AAPL, HD, EW, NVDA, RNG, DE, AGN, DG, CELG, NKE, VLO, SWKS, PAYX, TER
Bearish Stocks: VRTX, JAZZ, EOG, FANG, IRBT, RCI, OXY, YELP, CLR
Be sure to check earnings release dates.
