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.
CURRENT POSITIONS:
GOGO Long at $19.93
Total Premium Collected $1.95
ASNA Long at $14.20
Total Premium Collected $0.75
DUST Long $4.50
Total Premium Collected $0.70
SNAP Long at $14.54
Total Premium Collected - $1.65
OI Long Feb $19 call @ $1.70
KMI Long (1) Nov 23rd-$17.50 call @ $0.20
KMI Long (2) Nov 23rd-$17.00 put @ $0.40
MDR Long @ $9.31
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As a reminder, all markets are closed tomorrow for celebration of Thanksgiving Day. I trust and hope you and your family have a wonderful holiday.
And Friday will be an early closing at 1:00 EST.
As I mentioned yesterday, there will be no daily update for the next two days. But, we do have one open position that expires Friday and that is the straddle position on KMI. I will certainly update you if we need to close the position.
The sell off continued yesterday. Or I should say, the selling wave has not stopped.
For the day, the S & P 500 closed 48.84 lower, at 2,641.89. This actually slightly exceeded the average true range which is 48.14 points.
However, the market opened yesterday with a huge bearish gap of 36.13 points.
So if you measure the low to low measurement, the move was 49.57 points.
The close percentage was 27% which tells us that there is about a 70% chance that the low will be violated before the high. And resistance from yesterday's daily bar is 2,648 to 2,650.
So, the question is where does that leave the market at the moment?
First, yesterday's daily bar was a gap down and an island. This type of price action can signify a short term bottom in the market. Today's price action should tell us that.
You want to watch the high, close and low from yesterday.
Those respective prices are 2,669.44, 2,641.89 and 2,631.52.
I say this because if the market can close above the high, it could signal a short term bottom.
The second scenario is this. Yesterday was the first close under the major 2,646.50 level.
As I have stated before, if we get two closes under 2,646.50, the market could drop to 2,500 to the 2,550 area.
Even if the market does bounce today, I am not certain a major bottom would be in.
I say this because the down to up volume yesterday was 8.25. This is the highest reading since the climax on October 10th.
But, it was not a selling climax. I usually consider a selling climax as one where the down to up volume exceeds 9 to 1. Yesterday was close. I would have preferred a climax to help us determine if yesterday could be a real turning point.
Pre open, the S & P 500 is trading about 16 points higher. This projects to an open around 2,658. If the market moves up, watch the high of 2,669.44.
2,683 would fill the down gap from yesterday. And 2,672 is one half the gap fill. These can be points of resistance, so watch if the S & P 500 tests these levels.
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 22.48. This would now suggest that if the VIX could close above 20.31 today, it should move up to 25.
20.31 should now be support. And watch for support at 21.88.
26.56 should be resistance.
SPX:
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
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
Yesterday was the first close under the major 2,646.50 level. If the S & P 500 has two closes under this level, the S & P 500 could drop to 2,000 to 2,550.
To move higher, the S & P 500 will need two closes above 2,658.70.
And the next minor level to the downside is 2,634.30.
2,675.80 should be minor resistance. 2,627 is minor support.
QQQ:
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 159.16. A close today under 160.94 and expect the QQQ to drop to 156.25.
Minor support should be at 157.81 and 156.25. 162.50 should be 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 145.99. This now suggests that if the IWM can close under 148.44 today, it should drop to 143.75.
A break under 143.75 and the IWM continues lower.
The IWM has been the weakest market and has dropped 9 levels off the top. This does suggest that the market is close to a bounce.
TLT:
Major level: 115.63
Minor level: 115.24
Minor level: 114.45 **
Major level: 114.06 Hit!
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 continued its bounce and closed at 115.06. The objective is now to 115.63. And yesterday, the TLT came within 17 cents of the objective.
114.84 is minor support. And 116.41 is resistance.
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 115.67. The GLD is just above the midband on its 30 minute chart. The midband is 115.62, which is one penny under the major 115.63 level.
The GLD will need to clear this level to head higher. If it can, it would then become support. A clear move away from the midband and the GLD should continue higher.
115.23 is minor resistance. 116.41 is minor resistance.
Short term charts are bullish.
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 64.96. At this point, the XLE would need two closes under 64.85 to drop to 62.50.
64.06 is minor support. And if the XLE breaks under it, expect it to head lower. And 67.19 is resistance.
Technical resistance is at 66.25.
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 84.80. The FXY should test 85.16. Yesterday's high came within 12 cents of it.
The FXY would have to move up to the 86 area for me to be convinced that this downtrend is over. Still a bounce in a bear market.
84.77 is minor support. And resistance is at 85.55.
AAPL:
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 <
Minor level: 198.44 **
Minor level: 195.31
Major level: 193.75
Apple closed at 176.98 yesterday. It was down 8.88 and is firmly under the midband, which is now 187.85.
And it broke with heavy volume which is quite bearish.
Apple is close to the 175 objective I mentioned a while back. A bounce could happen around this level.
WATCH LIST:
Bullish Stocks: CME, MCD, AAP, CLX, VMW, UHS, VRSK, DATA, HSY, CTSX, GPC, ATO, XLNX, ICE, OMC, GOOS, ROL, HLF, FL, THS, TWTR
Bearish Stocks: GS, NVDA, FB, STMP, FB, OLED, SWKS, CELG, DVA, EBIX, KORS, SLB, DVN, HAL
Be sure to check earnings release dates.