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Not only is it Halloween here in the states, but today closes out the month of October. And yesterday, we finally got the dead cat bounce we were looking for.
The bounce was anticipated because the S & P 500 had bounced along the lower band on the 60 minute chart.
The result yesterday was the market closed 41.38 points higher. It closed at 2,682.63.
The good news is that it recouped the 2,646.50 level. This tells us that the S & P 500 will still need two closes under 2,646.50 to move lower.
And with a close today above 2,658.70, the S & P 500 should move up to 2,695.30.
With the S & P 500 trading about 21 points higher before the open, the 2,695.30 level should be taken out right at the open. Assuming this pre open activity holds into the open, it would suggest that 2,695.30 should be support on a pullback.
Even with the bounce yesterday, the daily price action for the S & P 500 was an inside day.
And with a projected open about 21 points higher, watch yesterday's high of 2,685.43 for support. Under this level, support is in the 2,662 area.
The midband on a short term intra day chart is at 2,692.91. This level is under the projected open and should be an area of support on a pullback.
As for overhead resistance, I would expect it at 2,741 area. This is the midband on the daily chart and because the market traded under it, it now becomes resistance.
Finally, scaling back to the monthly chart, the upper band is 2,720. And yesterday's close was about 40 points under it. Based on yesterday's range of 50 points, it is possible the market could recoup that level.
Regardless, it is an important price on the upside to monitor.
It appears likely that the range for the month is in. The range is 336 points and the monthly average true range is 135.
Before we declare an end to this correction, we need to be mindful that the October monthly bear should qualify as a bearish long range candle.
And the projected midpoint, based on the high and low prints already made, it would be 2,772.
And yesterday closed at about 90 points under it.
Depending upon where the market closes today should give us the odds of the market moving lower or higher for the next move.
My odds at the moment suggest that this correction is not over. But it could change based on today's close. I am not a cheerleader for the bulls, now I am a bear. I only read it as I see it.
Facebook reported last night and is trading about $7 higher in the pre market.
Continue to monitor the levels as I mentioned.
Here are the Key Levels for the Markets:
$VIX:
Major level: 31.25
Minor level: 29.69
Minor level: 26.56
Major level: 25.00 <
Minor level: 23.44
Minor level: 20.31
Major level: 18.75
Minor level: 17.19
Minor level: 14.06
Major level: 12.50
The VIX closed at 23.32. Yesterday's high was 25.55 and the VIX quickly sold off to under 25. We had expected resistance at 25 and it happened again.
If the VIX breaks under 23.26, I would expect resistance there in the event it does rally.
The major positive action to support the case that this correction is over is because the VIX could only move two levels. I would have expected a three-level move as a strong indication that the temperature of this market is changing.
20.31 could offer minor support. And 25 should still be resistance.
SPX:
Minor level: 2,780.78
Minor level: 2,756.33
Major level: 2,744.10
Minor level: 2,731.90
Minor level: 2,707.50
Major level: 2,695.30
Minor level: 2,683.10
Minor level: 2,658.70 <
Major level: 2,646.50 **
Minor level: 2,634.30
Minor level: 2,609.90
Major level: 2,597.70
With an expected open above 2,695.30, I would expect support there if the market has an intra day pullback.
2,725 could offer minor resistance. And 2,700 should offer minor support as well.
QQQ:
Minor level: 179.69
Minor level: 176.56
Major level: 175.00
Minor level: 173.44
Minor level: 170.31
Major level: 168.75 <
Minor level: 167.19
Minor level: 164.06
Major level: 162.50 <
Minor level: 160.94
Minor level: 157.81
Major level: 156.25
The QQQ closed at 165.92. 168.20, which is the midband on the daily chart, should be resistance.
And at this point, if the QQQ can close above 164.06 today, it should move up to 168.75.
The midpoint of the October monthly bar is 173.81, and the QQQ is still about 8 points under it.
164.06 is a minor support level.
At this point, I would expect major resistance at 168.75 and 171.88.
Watch yesterday's high of 166.04. It should offer support on a pullback.
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 149.73. 150 should be resistance now for the IWM. If it clears 150, look for support there.
148.44 should offer minor support. And 151 minor resistance.
The midpoint of the monthly bar is 157 and the IWM is about 7 points under it.
TLT:
Major level: 115.63
Minor level: 115.24
Minor level: 114.45
Major level: 114.06
Minor level: 113.67 **
Minor level: 112.89
Major level: 112.50
The TLT closed at 114.16. And major support is at 114.06. Minor resistance is at 114.84.
The midpoint of the monthly bar is 114.88, which is right around the minor resistance level. Where the TLT closes today should give us an indication as to whether this bear move can continue.
GLD:
Major level: 118.75
Minor level: 117.97
Minor level: 116.41
Major level: 115.63 <
Minor level: 114.85
Minor level: 113.28
Major level: 112.50
Minor level: 111.72
Minor level: 110.16
Major level: 109.38
The GLD closed at 115.80. Yesterday's low was one cent above the major 115.63 level. A break under this level and expect the GLD to continue lower.
115.23 is minor support. And 116.41 minor resistance.
Daily trend remains bearish, but the 60 minute chart is bullish. The GLD should bounce until the 60 minute comes in alignment with the daily chart.
XLE:
Minor level: 72.66
Major level: 71.88
Minor level: 71.10
Minor level: 69.53
Major level: 68.75
Minor level: 67.97
Minor level: 66.41 **
Major level: 65.63
Minor level: 64.85
Minor level: 63.28
Major level: 62.50
The XLE closed at 66.75. With a close today above 66.41, the XLE should test 68.75.
66.41 is minor support. And minor resistance is at 67.97.
The XLE has moved up off the lower band on the 60 minute. That level is 64.63.
FXY:
Major level: 85.94
Minor level: 85.75
Minor level: 85.36
Major level: 85.16
Minor level: 84.97
Minor level: 84.58 **
Major level: 84.38
Minor level: 84.18
Minor level: 83.79
Major level: 83.59
The FXY closed at 84.57. 84.38 should offer support, and that should be the objective.
84.77 should now be minor resistance.
AAPL:
Major level: 231.25
Minor level: 229.69
Minor level: 226.56
Major level: 225.00
Minor level: 223.44
Minor level: 220.31
Major level: 218.75 <
Minor level: 217.19 **
Minor level: 214.06
Major level: 212.50
Apple closed at 213.30. Short term, Apple is oversold, but I would stand aside until after earnings, which is tomorrow afternoon.
209.38 is minor support. And 215.63 should offer resistance.
WATCH LIST:
Bullish Stocks: AMT, PG, LW, WPC, O, PEG, SAVE, TWTR, KDP
Bearish Stocks: LMT, ANET, GS, FDX, BIDU, MMM, GD, BABA, DE, CMI, CAT, FANG, URI, RCL, ALL, SWKS, JACK, CELG, GILD
Be sure to check earnings release dates.