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 closed out the week by selling off 15.72 points on Friday. The week closed out at 2,961.90.
The high on Friday took out Thursday's high by 3 cents before selling off.
The range for the day ended the day at 41.78 points. This certainly qualified as an expansion because the range was 134% of the daily average true range, which is now 31.10 points.
So, once again, an expansion followed a contraction. The range on Thursday was only 23.57 points.
And for the day, the S & P closed at 39% of the daily bar. This does suggest that Friday's low of 2,945.53 should be violated before the high, which was 2,987.31.
Resistance from Friday's daily bar is in the 2,966 to 2,974 area.
For the week, the S & P 500 closed 30.28 points lower. The weekly contracted. So, this was the third consecutive week where the weekly range contracted.
The weekly range turned out to be 62.35 points. And the weekly average true range is 76.79 points.
We do expect a range expansion after these series of contractions.
The last time we had a series of weekly contractions was on July 27th. The following week sold off 93.81 points and had a range of 111 points.
The resistance area from last week's price bar is in the 2,973 to 2,977 area.
The market is hanging around the major 2,968.80 level. Watch to see if the market can hold this level.
Earnings season should kick off in two weeks. Costco reports Thursday after the close.
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 17.15 on Friday. The VIX got as high as 18.69 or just under the major 18.75 level, where we expected resistance.
And the VIX closed just under the minor 17.19 level.
At this point, a close today under 17.97 and the VIX should drop to 15.63. And I would expect support at 15.63.
18.75 should still be resistance.
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 2,961.90. The major 2,968.80 level should now be resistance.
The S & P will need two closes under 2,929.73 to drop to 2,812.50. But, I would expect support at the 2,929 level.
Technical resistance should be at 2,980.
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 187.03. The QQQ got to just above 189.06 before selling off to under the major 187.50 level.
On the downside, the key level is 185.94. Two closes under 185.94 and the QQQ could drop to 181.
The 190 area should offer technical resistance.
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 151.16. Friday's low went to 50 cents above the 150 level.
Watch to see if the IWM can hold the 150 level.
The IWM came back down to test the midband on the daily chart. The midband is 150.60 and Friday's low 150.50.
If the midband cannot hold, I would expect further selling.
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 142.73. Friday, I wrote, "At this point, I would expect resistance at 142.97." And the high for the day was 142.98.
I still expect resistance at 142.97.
Watch to see if the 140.63 level holds as support.
The TLT had a double inside bar so expect an expansion.
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 141.06. The GLD did take out 140.63.
And 142.97 should offer minor resistance on the upside.
A break under the 140.63 level should signify that the GLD will continue lower. But, until then it should be support.
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 59.63. The XLE is trading right around the major 59.38 level.
If this level cannot hold, I would expect a further selloff.
59.38 should offer support. And 58.59 should offer minor support.
The 30 minute chart is still bullish, but the midband is 59.84 and the XLE is just under it. It will have to reclaim this level to head higher.
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 218.82. Apple is just above the 218.75 level. If Apple cannot hold this level, I would expect a drop to 217.19.
If this level cannot hold, I would expect a drop to 215.63.
218.75 should now be support.
Technical support is also at 217.
WATCH LIST:
Bullish Stocks: MLM, AAPL, NSC, RH, RH, AGN, KLAC, ITW, IBM, UTX, KSU, PG, PSX, NXPI
Bearish Stocks: NFLX, REGN, HUM, UNH, VRTX, MOH, BMRN, GRUB, GDOT, ALKS
Be sure to check earnings release dates.
