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 before the open, the market was actually trading higher. And then news came out around the world of rate cuts and the S & P 500 was down almost 60 points to the low of the day.
From the low, the market rallied back the rest of the day to close slightly higher on the day.
It closed out at 2,883.98, up 2.21 points on the day.
The range for the day was 66.46 points. This was not quite double the daily average true range, which is 36.55 points.
It was beginning to look like the market would not bounce from under the lower bollinger band on the short term charts.
As I said yesterday, I was looking for a bounce up to the midband on the short term charts. And I still believe that is the move to come.
But, yesterday did break under the lower bands again. So, there is a high probability we will see a retest of the lower bands after a rally.
Even with the large range yesterday, the market still closed within the body of the bearish long range candle from Monday.
The high on Monday is still resistance until it is violated. That price level is 2,892.17 or about 6 points away from yesterday's close.
But, the S & P closed at 88% of the range of the daily bar, so there is a high probability that yesterday's high will be taken out.
Pre open, the S & P is trading about 7 points higher, so it does appear that Monday's high and yesterday's high should be violated right at the open.
The first level of support from yesterday's daily bar is around 2,871. The next level is around 2,860.
The midband on the 30 and 60 minute charts are still the objective and should still offer resistance.
Here are the Key Levels for the Markets:
$VIX:
Major level: 28.13
Minor level: 27.35
Minor level: 25.78
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
The VIX continued to drop yesterday and closed 0.60 lower. It closed out the day at 19.57, which was the second day under 21.10.
This does suggest that the downside target is to 18.75. And the VIX is already within one point of it.
I would expect support at 18.75. So, if it is taken out, it should continute lower.
Resistance should be at 21.88.
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 the day at 2,883.98. This does suggest that the S & P should test the 2,968 level.
The market did break under the minor 2,851.58 level, but managed to recoup it by the end of the day.
2,905 should offer minor resistance. And the minor 2,880.90 level should offer 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 184.25. The objective should now be up to 187.50.
181.25 should still be support. And minor support is also at 182.81.
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 149.32. The IWM did hold the 148.44 level, implying that it should head higher.
148.44 should be support at this point. And if the IWM can clear 150, I would expect support there.
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: 136.72
Minor level: 135.16
Major level: 134.38
Minor level: 133.60
The TLT closed at 140.03. It closed within one point of the 140.63 level.
The TLT got within 1 point of the 143.75 level.
The TLT is seriously overbought. Watch the 143.75 level. I don't see the TLT clearing this level, but if it does, it should head higher.
It is well above the upper band on the daily chart, which is 138.34.
To move lower, the TLT will need one of two things, a close under the upper band or two closes under 139.85.
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: 134.48
Minor level: 133.60
Minor level: 132.03
Just like the TLT, the GLD is seriously overbought. It closed out at 141.02.
It gapped higher above the upper band. A break under the yesterday's low, which was 140.88, should signify a top is in.
At this point, 140.63 should be support. And like the TLT, a break under the upper band, which is 137.97 would indicate a pullback is coming.
137.50 should still be support on a pullback.
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 58.09. Biased for a move down to the 56 area. But if the XLE can hold 57.81, it would bounce higher.
Resistance should be at 60.94 and 62.50.
AAPL:
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
Minor level: 178.13
Major level: 175.00
Apple closed at 199.04. If Apple can reclaim 200, it should head higher. And 193.75 should be support.
And if 200 can hold, a move up to 206 should be expected.
Apple is still in a downtrend on the daily chart but it is getting closer to crossing into an uptrend. And if it can do that, it should head higher.
WATCH LIST:
Bullish Stocks: SHOP, MLM, MCO, LHX, WIX, RNG, GLD, VMC
Bearish Stocks: BA, DPZ, DXCM, URI, FIVE, FANG, EOG, LGND, JACK, CXO, GRUB, COP
Be sure to check earnings release dates.
