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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XLNX Long September 20th - $110 call for $4.80
XLNX Short September 20th - $115 call for $2.70
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The market close slightly lower on Friday. It closed out the week down 2.18 points for the week. The week closed out at 3,007.39.
I would have preferred a close above 3,007.85, but I think it is close enough to consider the level hit for the second time.
This would suggest that the major 2,968.80 level should be support.
And if that level cannot hold, then I would think that 2,929.73 would.
Nevertheless, Friday's price action was a narrow range inside bar.
The range for the day was only 14.43 points as compared with a daily average true range of 33 points. So, the range was less than one half the average.
And with an inside day, we expect a range expansion.
Typically, the market will move in the direction of the violation. For example, if the low is violated, the market should move in that direction, and vice versa.
For the week, the S & P closed 28.68 points higher. The weekly range contracted as well.
The range for the week was only 63.73 points, which was about 17 points less than the average.
And the weekly bar closed at 79% of the bar. This still puts the odds of violating the high before the low.
The support area from last weeks bar is in the 2,989 to 2,998 area.
The big news is the drone attack on the Saudi oil fields.
This has taken out about half their oil production and sent oil prices spiking.
And pre open, the S & P is trading about 8 points lower. This suggests the market will open about 3 points below Friday's low of 3,002.90. This would now suggest that the low and Friday's close of 3,007.39 should be resistance.
Earnings do continue this week. ADBE and FDX report tomorrow after the close.
Here are the Key Levels for the Markets:
$VIX:
Major level: 25.00
Minor level: 24.22
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 at 13.74 on Friday. The VIX should drop to 12.50.
But, with the pre open selloff, I would expect the VIX to bounce.
Look for resistance at the 14.85 level and at 15.63.
SPX:
Minor level: 3,164.08
Major level: 3,125.00 <
Minor level: 3,085.95
Minor level: 3,007.85 **
Major level: 2,968.80 <
Minor level: 2,929.73
Minor level: 2,851.58
Major level: 2,812.50
Minor level: 2,773.45
Minor level: 2,695.35
Major level: 2,656.30
The S & P closed just under the 3,007.85 level. Support should be at the lower levels. Namely, the 2,969 area and at 2,930 levels.
Minor support should be at 3,004.20.
Short term trends remain bullish. Look for technical support around 2,934.
QQQ:
Major level: 196.88
Minor level: 196.10
Minor level: 194.53
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
The QQQ closed at 192.54. Friday's high was 35 cents short of the 173.75 objective.
191.41 should be a short term support level. And 190.63 should offer support as well.
Like the S & P, the short term 60 minute chart is bullish. And technical support should be at 188.
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 157.31. Support should be at the major 156.25 level and the minor 154.69 level.
Two closes above 157.81 and the IWM should head up to 162.50.
Technical support should be around 151.
TLT:
Major level: 143.75
Minor level: 142.97
Minor level: 141.41
Major level: 140.63
Minor level: 139.85
Minor level: 138.28
Major level: 137.50 <
Minor level: 135.84
Minor level: 132.81
Major level: 131.25
The TLT closed at 136.54. The next level to the downside is 131.25. It will need two closes under 135.84 to suggest a drop to that level.
The 131 area should offer support. And resistance should be at 138. Technical resistance is around 141.
GLD:
Major level: 150.00
Minor level: 148.44
Minor level: 145.31
Major level: 143.75 <
Minor level: 142.97 **
Minor level: 141.41
Major level: 140.63 <
Minor level: 139.85
Minor level: 138.28
Major level: 137.50
Minor level: 136.72
Minor level: 135.16
The GLD closed at 140.15. Watch the 140.63 level. This should be resistance. But, if the GLD breaks above it, look for it to offer support.
139 is a minor support level. A break under this level and look for the GLD to head lower.
XLE:
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: 55.86
Minor level: 55.08
Major level: 54.69
The XLE closed at 61.08. The objective for the XLE should be up to 62.50. And the XLE should open above it today on the news. Look for it to act as support on a pullback.
The short term 60 minute chart is bullish. Look for technical support around 59.
AAPL:
Major level: 225.00
Minor level: 221.88
Minor level: 215.63 **
Major level: 212.50 <
Minor level: 209.38 **
Minor level: 203.13
Major level: 200.00
Minor level: 196.88
Minor level: 190.63
Major level: 187.50
Minor level: 184.38
Apple closed at 218.75. With a close today under 221.88, look for Apple to drop to 212.50.
221.88 should offer support. And 215.63 should be a short term support level.
As I said, Apple is overbought in the short term. And it is pulling as as expected.
WATCH LIST:
Bullish Stocks: LMT, GOOGL, MLM, ASML, LRCX, HD, AAPL, BABA, RH, DE, CMI, ITW, UTX, ZBH
Bearish Stocks: REGN, HUM, SQ, GDOT
Be sure to check earnings release dates.
