While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to 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 market closed out the week by closing 25.82 points lower on Friday. It closed out the week at 2,781.01.
The market did manage to rally back and closed at 56% of the daily bar. So, at this point, there is no statistical bias as to the high or low violation.
The S & P 500 rallied back right to the midband on the 60 minute chart and stalled right at it. The midband is now 2,807.60, but when it stalled against it, it was about 2,813. This was on the 7th and 8th.
And it marked the high for the week.
The resistance area from Friday's daily bar is in the 2,780 to 2,787 area.
For the week, the S & P 500 managed to close 57.95 points higher. And it closed at 65% of the weekly bar.
This puts the odds of violating the high before the low right around 65%.
The range for the week was 97 points which exceeded the average of 76 points. Exceeding the average is generally bullish.
When we look at the resistance levels, we see that the market closed just above the downside confirming levels of 2,780.78.
The S & P 500 would need two closes under 2,780.78 to drop to 2,744.10. Should this happen, I would expect strong support at the 2,744 level.
Finally, if we look to the shorter term intra day charts, we can see where support should be.
First of all, the 60 minute chart is still bearish and as I mentioned, the S & P 500 rallied back to the midband and has now bounced off it. This is typically where the market should go after being under the lower band.
The 30 minute chart is bullish. And the midband on the 30 minute is 2,742. This should now be an area of support and the S & P 500 is still about 40 points above it. So, a 40 point drop would still not affect the bullish market.
Earnings continue this week. The big report that will be closely followed will be Nvidia. NVDA reports Wednesday after the close.
Pre open, the market is showing weakness. The S & P 5000 is trading about
7 points lower.
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 17.40. For the week, the VIX closed 2.11 points lower. 17.19 is next key level on the downside. Two closes under 17.19 and the VIX should test 12.50.
18.75 should be resistance. The VIX has had two closes under 17.19, so the higher levels should be resistance.
14.06 is minor support on the downside.
SPX:
Major level: 2,841.80
Minor level: 2,829.60
Minor level: 2,805.20 **
Major level: 2,793.00 <
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
As I said, the S & P 500 will need two closes under 2,780.78 to move down to 2,744.10.
The 30 minute chart is bearish. And the VIX is trading under the midband which is 20.51 and should be resistance.
QQQ:
Major level: 178.13
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
The QQQ closed at 171.52. This now suggests that if the QQQ closes under 173.44 today, it should test 168.75.
The QQQ has the same short term technical setup as the S & P 500. That is the 60 minute is bearish and the 30 minute is bullish.
The QQQ is right at the midband on the 30 minute chart which is 171.28. A break under this level would be bearish
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 154.08. The midband did offer resistance.
The IWM will have to clear the midband to head higher.
At this point, if the IWM closes under 154.69 today, it should drop to 150.
Technical support for the IWM is at 153.
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
Minor level: 112.11
Minor level: 111.33
Major level: 110.94
The TLT closed at 113.35. This now implies that if the TLT can close above 112.89 today, it should run up to 114.
We were expecting a bounce from its oversold condition and we are getting it.
112.89 should now be minor support. Short term charts remain bearish with the midband on the 30 minute at 133.58.
The TLT will need to clear this level to move higher.
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 114.48. A close today under 114.85 and the GLD should drop to 112.50.
114.84 should be minor resistance along with 115.63.
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 68.50. The XLE is still bouncing around the major 68.75 level.
The short term, 30 minute chart has crossed into an uptrend. And the midband is 69. The XLE will need to clear this level to move higher.
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 83.99. If the FXY can close above 83.79 today, it should head up to 84.38.
83.79 is a short term level that should offer support. If the FXY breaks under it, I would expect it to head lower.
AAPL:
Minor level: 220.31
Major level: 218.75
Minor level: 217.19
Minor level: 214.06
Major level: 212.50
Minor level: 210.94
Minor level: 207.81
Major level: 206.25
Minor level: 204.69 **
Minor level: 201.56
Major level: 200.00 <
Apple closed at 204.47. This now suggests that if Apple closes under 204.69 today, it should drop to 200.
200 is a key support level. If Apple breaks under it, I would expect it to continue lower.
WATCH LIST:
Bullish Stocks: CMG, COST, CME, ZBRA, CLX, DXCM, DIS, DATA, HSY, GPC, ESRX, UAL, EXR, WBA, LW
Bearish Stocks: NVDA, FB, CXO, FANG, EA, CLB, SLB, SRCL, WDC
Be sure to check earnings release dates.