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 - $2.20
SNAP May 4th $11.50 call for $0.13
SNAP May 4th $10.40 call for $0.68
RRC Long at $11.85
Total Premium Collected $0.70
RIG Long at $8.81
Premium Collected - $1.45
FEYE Long at $17.18
Total Premium Collected $0.80
CLW Long May - $20.00 call for $2.00
AMC Long at $16.16
Total Premium Collected $0.35
.........................................................................................
May starts out with some weakness. For the day, the S & P 500 closed 22.10 points lower. It ended the day closing at 2,923.73.
The market got as high as 2,954.13, before dropping about 31 points to a low of 2,923.36.
The selloff began after the Fed announcement at 2:00 PM.
So, is this the start of the correction?
I think it is too early to tell, but perhaps it is. But, the one thing we have been looking at to help us determine if a top is in is the VIX.
And as I was talking on John's webinar yesterday, I mentioned that we were looking for a move above 13.28 on the VIX. It turned out that when I checked the price live at the time, the VIX just happened to be sitting right at 13.28.
A short while later, I saw the VIX under 13.28. It actually dropped to a low of 12.74.
Then it began to move up strongly to close for the day at 14.80. It jumped 1.68 or 12.8%.
Of course, this was the first close above 13.28. The key for today will be to see if the VIX closes again above 13.28.
The other fact about yesterday was that the down to up volume registered 3.62. Just the other day, I wrote about how the last major top had a day that registered over 2.50.
So, now we have two things to help us to determine if a major top is in.
Also, we know the major 2,968.80 level is our current active objective. And it is a very important level.
A failure at this level and I do expect a deep pullback.
For today, there are a few key factors to monitor. The VIX and its close in relationship to 13.28 will be something to monitor.
There is also the minor 2,929.70 level on the S & P 500. If the S & P 500 cannot reclaim this level, I do believe it would be bearish for the short term.
Resistance from yesterday's daily bar is in the 2,938 area.
Pre open, the S & P 500 is trading about 3 points higher.
Here are the Key Levels for the Markets:
$VIX:
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 <
Minor level: 11.72 **
Minor level: 10.16
Major level: 9.38
So yesterday we got a pop in the VIX. For the day it was up 12.8% and closed well above the minor 13.28 level.
As I mentioned above, a close above 13.28 today would make the 15.63 level the active objective.
14.84 is a minor resistance level and if the VIX clears this level, I would expect it to head higher.
13.67 is a short term support level. A retest of 13.28 is possible. A close above or below it should tell us where the market moves in the short term.
SPX:
Major level: 2,968.80 <
Minor level: 2,849.25 **
Minor level: 2,910.15
Major level: 2,890.60
Minor level: 2,871.08
Minor level: 2,832.03
Major level: 2,812.50
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
The upside objective is still to 2,968.80. To invalidate this, the S & P 500 would need two closes under 2,849.25 and at this point, the market is still about 70 points above it.
2,929.70 is the key level in the short term. If the S & P 500 cannot recoup this level, I would expect a move to 2,880.
2,954 should be short term resistance.
Short term charts remain firmly bullish. Technical support is around 2,905.
QQQ:
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
Minor level: 176.56
Major level: 175.00
Minor level: 173.44
Minor level: 170.31
Major level: 168.75
Minor level: 167.19
The QQQ closed out yesterday at 188.93. The next objective for the QQQ should be to 193.75. And the QQQ will need to reclaim 192.19 today to continue higher.
Minor support is at 188.28. A break under this level and the QQQ could head lower.
Technical support is around 187.
Like the S & P 500, both short term charts are bullish. And like the S & P 500, the QQQ is very close to crossing into an uptrend on its daily chart.
Continue to buy against support.
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 156.79. At this point, 156.25 should be support.
And support should also be at the midband which is 156.37.
157.81 should now be minor resistance.
Both short term charts are bullish. And technical support is around 156.
TLT:
Major level: 126.56
Minor level: 126.17
Minor level: 125.39
Major level: 125.00
Minor level: 124.61
Minor level: 123.83
Major level: 123.44
Minor level: 123.05 **
Minor level: 122.27
Major level: 121.88
Minor level: 121.49
Minor level: 120.70
Major level: 120.31
The TLT closed at 123.90. 124.45 was yesterday's high which put the TLT within 60 cents of the 126 objective.
124.22 should now be resistance. And minor support is at 123.44.
The 30 minute chart is close to crossing into an uptrend. If it does, look for higher prices.
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: 121.09 **
Major level: 120.31<
Minor level: 119.92
Minor level: 119.14
Major level: 118.75 <
The GLD closed at 120.40. 121.88 and 121.09 are minor resistance levels. And a close today under 121.09 and the GLD should drop to 119.
Technical resistance at 121.40.
Both the 30 minute and 60 minute charts remain bearish.
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 64.79. The XLE broke the major 65.63 level and closed under the minor 64.85 level.
A close today under 64.85 and the XLE should test 62.50. 65.63 should now be resistance.
The 30 minute chart has crossed into a downtrend. Short term momentum is shifting to the downside.
AAPL:
Major level: 212.50
Minor level: 210.94
Minor level: 207.81
Major level: 206.25 < HIT
Minor level: 204.69
Minor level: 201.56 **
Major level: 200.00
Minor level: 198.44
Minor level: 195.31
Major level: 193.75
Minor level: 192.19
Apple closed at 210.52. Apple gapped up after reporting. Apple was up $9.85 on the day.
Apple did hit the 212.50 level, but closed under it.
A failure to clear 212.50 and Apple should continue lower.
Short term charts remain bullish. And technical support is also around 195.
WATCH LIST:
Bullish Stocks: NOW, FLT, MA, LRCX, WDAY, VRSN, HON, CRM, V, ADP, DECK, CME, CB, DIS, WIX, MSFT, SPLK, KLAC, HSY, ADI, PYPL, TSCO
Bearish Stocks: TSLA, SPOT, CVX, PSX, RHI, WSM, WBA, BG, Z, STLD
Be sure to check earnings release dates.