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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Yesterday, the S & P 500 traded flat for the day. For the day, the S & P closed 0.28 points lower. It closed out at 2,991.79.
The range for the day once again contracted. The daily range was only 16.92 points. With a daily average true range of 28.80 points, the range was about 60% of the average.
I point these contractions out because they will ultamately lead to an expansion.
This happens all the time. Expansions lead to contractions and contractions lead to expansions.
The daily bar closed at 57% of the range. This does give a slight nod to taking out yesterday's high before the low.
The high for the day was 2,999.15, which is right at the upper end of the resistance level from last week's weekly price bar, which is right around 3,000.
And the resistance level from yesterday's daily bar is in the 2,987 to 2,990 area. Look for support around this level.
Pre open, the S & P 500 is trading about 8 points higher. Assuming this trading holds up through the open, it should open right around yesterday's high.
The 2,990 to 2,992 area should offer strong support on a pullback.
The short term 30 minute and 60 minute charts remain bullish. This does suggest we should get another rally.
Continue to watch for a violation of last week's high or low. Last week's high was 3,021.99 and the low was 2,978.57.
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 14.91 yesterday. For the day, the VIX closed 0.41 points lower.
The high for the day was 16, or about 40 cents above the major 15.63 level before it sold off. This is not unexpected, as we anticipated resistance at the higher levels.
Watch the 14.85 on the downside. The VIX would need two closes under this level to drop to 12.50.
The VIX is oversold but it has not tested 12.50. Typically, this level should indicate the VIX is oversold.
There is minor support at the 14.45 and 14.06 levels. A break under 14.06 and look for the VIX to continue 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 2,991.78. The S & P has been struggling to close above the 3,007.85 level.
Watch the minor 2,998 level to see if the S & P can clear it. If it can, I would expect support there.
As you know, that is the next minor level to the upside.
2,991.90 is also a minor support level.
Short term trends remain bullish. Look for technical support around 2,964.
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 190.50. Watch to see if the QQQ can reclaim 192.19 today. If it can, the QQQ should head higher.
Minor support should be at 189.06. And minor support is also at 189.84.
Technical support should be around 189.60.
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 155.31. The IWM will still need two closes above 157.81 to test 162.50.
153.13 should offer strong support on the downside. And I would not expect a drop under this level.
If the IWM can reclaim 155.47, it should head higher.
152.50 should offer technical support.
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 141.86. The objective for the TLT should be to test 143.75.
143.75 should offer resistance on the upside.
A move up to test the upper band seems to be shaping up. The upper band is 149.63.
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 143.75. The GLD closed right on the 143.75 level.
Short term charts are both bearish, and the 143 area should offer technical resistance. And 145.31 is a resistance level on the upside.
XLE:
Major level: 65.63
Minor level: 64.85
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
The XLE closed at 61.30. The XLE will need to relcaim 61.72 to head higher.
The 30 minute chart is still bullish. And the 60 minute chart is bullish as well. And technical support is at 59.
AAPL:
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
Minor level: 190.63
Major level: 187.50
Minor level: 184.38
Apple closed at 218.72. 215.63 should offer support on the downside.
On the downside, support should be at 212.50. And technical support is around 215.
WATCH LIST:
Bullish Stocks: ORLY, LMT, NOW, MLM, STZ, FB, BABA, HON, KLAC, EXPE, MSFT, WMT, ATO
Bearish Stocks: NFLX, RARE, CLX, ETE, NTGR
Be sure to check earnings release dates.
