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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On yesterday's webinar, I mentioned how I felt that the VIX should give us the clue that the market should reverse to the upside.
I discussed how I did not feel the VIX would exceed 18.75 and that a run-up to the 21.88 level would like signal more selling pressure to follow.
As it turned out, the VIX hit a high of 18.45 before dropping to close at 15.96.
Once the VIX began to turndown, the S & P stalled at 2,952.86 and proceeded to rally to the high of the day, which was 2,989.82. This resulted in a range for the day just under 37 points.
The daily range exceeded the average true range, which is 30.80.
For the day, the S & P made a new daily low and rallied to close above the midpoint of the bearish long-range candle from Tuesday.
Typically this is a bullish sign.
The support area from yesterday's daily bar is in the 2,971 to 2,977 area.
The close for the day, which was 2,984.87, came right within the support/resistance level from last week's weekly price bar. As you know, this area is 2,982 to 2,985.
If the S & P can clear the upper level, it should act as support. Until that happens, it is still resistance.
Pre open, the S & P is trading about 3 points higher, so it should open just above the upper end of the weekly level. Watch how the market reacts at this level.
The 30 minute and 60 minute charts still remain bullish for the S & P. But, the 30 minute chart is close to crossing into a downtrend. If it does, short term momentum should shift to the downside.
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 15.96 yesterday. The VIX dropped 1.09 points. The VIX will need to break under the major 15.63 level to head lower.
And at this point, resistance should be at 17.19.
Watch the 14.84 level if the VIX breaks under 15.63. This should offer support, but if it can't, a drop back to 12.50 would be the next move.
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 2,984.87. The low for the day was 2,952.86, which just under the minor 2,954 level. This level should still be support.
And with a close above 2,978, watch to see if support holds at this level.
Look for another run to the 3,007.85 level.
Short term trends remain bullish. Look for technical support around 2,975.
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 190.08. The low for the day dropped under the major 187.50 level and managed to close above it.
The minor 189.06 level should act as support. If the QQQ can clear 190.63, it should head higher.
Technical support should be around 188.
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 154.10. The IWM will still need two closes above 157.81 to test 162.50. And watch to see if the IWM can clear the 154.69 level.
153.13 should act as support on the downside. And 153 should offer technical 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 141.47. It dropped 2.10 points for the day.
Watch to see if the 140.63 level holds as support.
A move up to test the upper band seems to be shaping up. The upper band is 149.90, which is right at the next major level.
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 141.83. The GLD dropped 2.68 points. Like the TLT, the GLD seems to be doing the retest of the upper band and failing.
A break under the 140.63 level should signify that the GLD will continue lower. But, until then it should be support.
143 is technical resistance.
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 60.43. If the XLE can close above 60.16 today, it should run up to 62.50.
59.38 should offer support
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 221.03. 215.63 should offer support on the downside. And if Apple can clear 221.88, it should run to 225.
218.75 should now be support.
Technical support is also at 218.
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.
