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
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DUST Long $4.50
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SNAP Long at $14.54
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FEYE Long at $17.18
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AMC Long at $16.16
Total Premium Collected $0.35
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After the strong bullish move two weeks ago, the market moved up slightly last week. A pause after a large move is not unexpected.
And for the week, the S & P 500 closed 13.64 points higher. The market closed at 2,886.98.
The range for the week was only 35.93 points. This was well below the weekly average true range, which is now 77.84 points.
The weekly bar formed an almost perfect doji bar. This is usually a narrow range bar where the close is approximately the open.
And that was certainly true last week. The open for the week was 2,885.83 and it closed at 2,886.98.
So, the close was within one point of the open.
And the market essentially traded between our minor levels last week.
The low for the week was 2,874.68, which was a few points higher than the minor 2,871.08 level.
And the high for the week was 2,910.61, which was virtually on the 2,910.15 minor level.
As you know, the significance of these levels is for the market to confirm a move higher, it will need two closes above 2,910.15 and to move lower, it needs two closes under 2,871.08.
So, last week, the market tested both levels.
The question for this week will be which direction will the market confirm.
A doji bar can mean indecision, or it can be a pause before the move continues.
The close should be a level to watch this week. So, watch 2,886.98 for either support or resistance.
The midpoint should also offer support. The midpoint is 2,892.65.
Friday's daily bar was also a doji bar. And it also contracted. The daily range was only 14.83 points. This was well below the daily average true range which is 30.58.
The daily support level is 2,887.
Pre open, the S & P 500 trading about 3 points higher.
This week we will hear from the Fed regarding interest rates. The decision will come on Wednesday at 2:00 EST.
Earnings do continue this week, but the number of companies reporting is low as we wind down to the end of this quarter.
ADBE reports this afternoon after the close.
Here are the Key Levels for the Markets:
$VIX:
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
Minor level: 11.72
The VIX closed yesterday at 15.28. To move higher, the VIX will still need two closes above 16.41 to move higher. And the VIX still has not closed above it.
With a close under 15.63, this level should offer strong resistance.
14.84 is a support level. If the VIX does take out 14.84, expect it to continue lower.
SPX:
Major level: 2,968.80
Minor level: 2,949.25
Minor level: 2,910.15 **
Major level: 2,890.60 < < HIT
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 market continues to hang around the major 2,890.60 level ... for a second day.
Minor support is at 2,880.90. So, watch this level if the market does pullback.
I am expecting a run to 2,910.15. And as you know, if the S & P 500 can close above it for two days, it should run up to 2,968.80
Technical support should be in the 2,865 area.
The 60 minute chart is close to moving into an uptrend.
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 at 182.64. At this point, the objective is to 187.50.
181.25 should still be support. And Friday's low came to 181.94.
Technical support is at 181. Like the S & P 500, the QQQ is close to crossing into an uptrend.
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 151.73. Still biased for a move up to 156.25.
But, as you know, the midband is right at the 155.57 level. This should be resistance, until it is violated.
150 should be strong support. Minor support is at 150.78.
TLT:
Major level: 134.38
Minor level: 133.60
Minor level: 132.03
Major level: 131.25
Minor level: 130.47 **
Minor level: 128.91
Major level: 128.13
Minor level: 127.74
Minor level: 126.95
Major level: 126.56
Minor level: 126.17
Minor level: 125.39
Major level: 125.00
The TLT closed out at 131.46. The TLT closed just above the upper band, which is now 131.28.
The TLT is overbought but wait for a strong close under the upper band before shorting.
131.25 is strong support. And minor support is at 130.86.
GLD:
Major level: 128.13
Minor level: 127.74
Minor level: 126.95 **
Major level: 126.56 << HIT
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: 121.49
Minor level: 120.70
Major level: 120.31
The GLD closed at 126.56. It closed exactly on the major level.
The GLD is overbought and I would expect it to pull back. But if it does clear 128.13, it should head higher. Two closes under 126.17 would indicate a drop to 125.
125 should offer support, so if the GLD breaks under it, I would expect more movement to the downside. If this should happen, watch the 123.44 level.
Two closes under 123.44 would suggest a drop to 119.
XLE:
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
Minor level: 58.60
Minor level: 57.03
Major level: 56.25
Minor level: 55.47
Minor level: 53.91
Major level: 53.91
The XLE closed at 61.01. The XLE should test 62.50. 62.50 is a strong resistance level. So if the XLE does clear 62.50, look for it to move higher.
On the downside, 59.38 is the key level. Two closes under this level and the XLE could drop to 50.
The 30 minute chart has crossed into an uptrend, so momentum is shifting to the upside.
AAPL:
Minor level: 203.13
Major level: 200.00
Minor level: 196.88
Minor level: 190.63 **
Major level: 187.50 <
Minor level: 184.38
Minor level: 178.13 **
Major level: 175.00
Minor level: 171.88
Minor level: 165.63
Major level: 162.50
Apple closed at 192.74. At this point, I do expect a test of 200.
Apple could test 187.50. And this would be a great area to get long.
200 is a key level for Apple. If it does take out 200, it should move up to 250.
WATCH LIST:
Bullish Stocks: CMG, ORLY, ANTM, MCD, LIN, ACN, DECK, CB, KMB, DG, RACE, PYPL, YUM, ALL, ROKU, WING
Bearish Stocks: NFLX, DPZ, AGN, CXO, UTHR, NTAP, FIZZ, PRGO, AMTD
Be sure to check earnings release dates.
