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.
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
RRC Long at $11.85
Total Premium Collected $0.70
RIG Long at $8.81
Premium Collected - $0.46
FEYE Long at $17.18
FEYE Short March 8th-$17.50 Call @ $0.30
FCX Long at $12.74
FCX Short March 15th - $13 Call @ $0.24
TSLA Long March 15th - $280 Call @ $5.70
TSLA Short March 15th - $287.50 Call @ $2.70
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Yesterday I suggested a weekly covered call on FCX. The idea was to buy FCX and sell the $13 calls that expire next week against the position.
And I suggested a short term debit spread on TSLA. This trade is based on TSLA being oversold in the short term. Also, risk is limited when trading short term options. Total risk on the trade is less than 1% of the portfolio.
After the long-range day on Monday, yesterday saw a price contraction.
Monday's range of 49.22 points was followed by yesterday's range of 13.47 points.
So, Monday had a range almost twice the daily average true range and yesterday's range was about one half of it.
And of course, yesterday was an inside day.
I point this out because if you do day trade, knowing the price expectation can help to close positions quickly knowing you will most likely not get big swings.
Or, when you are expecting a price contraction, it is better perhaps not to try and trade at all intra day. This is usually when mistakes are made.
But, we do know that price expansions follow price contractions. The only question is when.
Having said that, for the day the S & P 500 closed 3.16 points lower at 2,789.65.
As I mentioned yesterday, for the bullish move to continue, the S & P 500 would have to close back above the minor 2,792.98 level.
This was after closing under it by 17 cents on Monday.
Because the market was able to close back above it, I am still biased to the upside.
So, for today, the key levels to watch are the 2,789 to 2,792 area.
You also want to monitor the high of 2,796.44 and low of 2,782.97, for violation.
Usually, price will continue in the direction of the violation.
The support area from last week's price bar continues to be in the 2,794 to 2,804 area. Yesterday's close was right in the middle of this area.
Like a violation of the daily high or low, you want to monitor the violation of the resistance area.
Pre open, the S & P 500 is trading about 5 points lower.
Earnings do continue this week.
This afternoon we will get earnings from CASY.
Here are the Key Levels for the Markets:
$VIX:
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 out at 14.77 yesterday. The VIX was up 0.14 for the day.
The VIX as still remained under the 14.85 level. And yesterday's high came to 15.39 or 24 cents under the 15.63 resistance level before dropping.
Minor resistance should be at 15.23 and 14.84.
Downside target remains at 12.50.
SPX:
Major level: 2,890.60
Minor level: 2,871.08
Minor level: 2,832.03
Major level: 2,812.50 < Target Hit!
Minor level: 2,792.98 **
Minor level: 2,753.93
Major level: 2,734.40
Minor level: 2,714.88
Minor level: 2,675.83
Major level: 2,656.30
Minor level: 2,636.75
Minor level: 2,597.65
At this point, minor support should be at 2,792.98. And the minor 2,773.40 level.
With a close back above 2,792.98, this now resets the criteria for a move lower.
Both the 30 minute and 60 minute charts remain in uptrends which does suggest that buying against support is still the viable strategy.
Monday, the S & P 500 sold off and stopped right at the lower band on the 10 minute chart. And since then, it did the expected rally back to the midband which is 2,792.98. There is that number again!
So, not only it is a resistance level, but it is technical level as well.
Obviously, this is the level to watch today.
QQQ:
Major level: 181.25
Minor level: 179.69
Minor level: 176.56 **
Major level: 175.00 < Hit!!!
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
The QQQ closed at 174.55 yesterday. The QQQ is now trading around the major 175 level.
In order to move higher, the QQQ will need two closes above 176.56.
Like the S & P 500, both the 30 & 60 minute charts remain firmly bullish.
174 should be technical support for the QQQ. And 173.44 should be a minor support level.
IWM:
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 <
Minor level: 154.69
Minor level: 151.56
Major level: 150.00
Minor level: 148.44
The IWM closed at 156.08. The objective should be up to 162.50.
Yesterday's close was 30 cents under the midband which is 156.38. It will have to recoup this level to continue higher. If not, a pullback should happen.
If the IWM does pullback, I would support at 153.13. And technical support is around 155.
Both the 30 and 60 minute charts remain strongly bullish.
TLT:
Major level: 121.88
Minor level: 121.49
Minor level: 120.70
Major level: 120.31
Minor level: 119.92
Minor level: 118.14
Major level: 118.75 <
Minor level: 118.36 **
Minor level: 117.58
Major level: 117.19
Minor level: 116.80
Minor level: 116.02
Major level: 115.63
The TLT closed at 119.84. The next level to watch is 117.58. Two closes under 117.58 and the TLT should drop to 117.19.
Watch to see if the TLT can take out 120.31. If it can, I would expect the TLT to continue higher.
At this point, 120.31 should be resistance.
GLD:
Major level: 126.56
Minor level: 126.17
Minor level: 125.39
Major level: 125.00
Minor level: 124.22
Minor level: 122.66
Major level: 121.88 <
Minor level: 121.10
Minor level: 119.53
Major level: 120.31
Minor level: 119.92
Minor level: 119.14
Major level: 118.75
The GLD closed at 121.72. It closed just under the major 121.88 level. It will have to close above 121.88 to move higher.
And a close under 121.10 and the GLD should drop to 120.31.
But, short term, the GLD is oversold.
If the GLD does continue to drop, I would expect strong support at 120.31.
XLE:
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
Minor level: 61.72
Minor level: 60.16
Major level: 59.38
The XLE closed at 66.35. The objective should be up to 68.75.
65.63 should now be a strong support level. And 66.02 is short term support. Both the 30 & 60 minute charts remain bullish.
And technical support is around 65.
FXY:
Major level: 89.84
Minor level: 89.65
Minor level: 89.26
Major level: 89.06
Minor level: 88.87
Minor level: 88.48
Major level: 88.28
Major level: 87.50
Major level: 86.72
Major level: 85.94
Minor level: 85.75
Minor level: 85.36 ***
Major level: 85.16
Minor level: 84.97
The FXY closed at 85.20. For the FXY to bounce, it will have to hold the 85.16 level.
It still needs two closes above 85.36 to move up to 85.94.
But it is oversold short term, so a bounce would be unusual.
85.16 is a minor support level and a bounce could happen.
Short term charts remain bearish. And the daily chart is also bearish. This would suggest strong technical resistance at the 86.30 level.
AAPL:
Major level: 187.50
Minor level: 184.38
Minor level: 178.13
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: 159.38
Minor level: 153.13
Major level: 150.00
Predicted High: 177.46
Predicted Low: 173.60
Apple closed at 175.53 yesterday. 175 should be support. And with two closes above 178.13, Apple should move up to 187.50.
173.44 should also be support.
Both the 60 minute chart remains bullish.
176.56 should offer some resistance.
172.66 should offer strong technical support.
WATCH LIST:
Bullish Stocks: CMG, BA, ULTA, MA, COST, SHOP, CRM, OLED, HON, UHS, ALXN, DG, MSFT, DG, AXP, PYPL, NKE
Bearish Stocks: NTES, STMP, WLK, GDOT, AN, MD, TWTR, LOGM, EZA
Be sure to check earnings release dates.
