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
RRC Long at $11.85
Total Premium Collected $0.70
RRC Long at $9.20
RIG Long at $8.81
Premium Collected - $1.45
FEYE Long at $17.18
Total Premium Collected $0.80
TEVA Long at $9.78
TEVA Short Dec 20th - $10 Call - $0.26
SNAP Long Dec 20th - $14 call for $0.44
SNAP Short Dec 20th - $15 call for $0.11
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Yesterday, I suggested a short term debit spread on SNAP. The idea with these trades is to use the leverage of the short-dated options to capture gains. But because they are short-dated options, the risk is strictly limited.
The market reversed to the upside after two days of pullbacks. The day ended up closing out 9.11 points higher.
The day closed out at 3,141.63. The low for the day ended up being 3,133.21, which was right around the support area from Tuesday's daily bar.
I have to admit, the thrust is not that strong. The range for the day was only 10.77. And the daily average true range is 20.75. So, the range for yesterday was about one half the average, which qualifies it as a range contraction.
None the less, the daily price bar made a higher high and higher low and closed at 78% of the daily price bar.
This does suggest that yesterday's high of 3,143.98 should be violated before the low.
The support area from yesterday's daily bar is in the 3,138 area.
The short term 30 minute and 60 minute charts continue to be in uptrends, so short term momentum is still bullish.
Pre open, the S & P is trading about 3 points higher. Assuming this trading holds up until the open, the market should open about a point above yesterday's high.
This would suggest to watch the close of 3,141 for support on a pullback and the support area of 3,138 as well.
LULU reported last night and is trading about $7 lower.
This afternoon, we will get earnings from COST, AVGO, ADBE and ORCL.
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
Minor level: 10.16
Major level: 9.38
The VIX sold off and closed out the day at 14.99. This put the VIX under the major 15.63 level.
The expectation was for the VIX to drop under 15.63 and that is what happened. The break was also expected because the VIX was up against the upper band on the 60 minute chart amd moved lower.
The upper band is now 16.24.
Technical support is at 14.60. And watch the 16.41 level in the upside.
SPX:
Minor level: 3,164.08
Major level: 3,125.00 < Hit
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 at 3,141.63. The S & P closed about 16 points above the 3,125 level.
A close today above 3,134.76 and the S & P should move up to 3,164.
Also, 3,134 should be support. 3,125 should offer major support.
Technical support is in the 3,128 area.
QQQ:
Major level: 206.26
Minor level: 205.48
Minor level: 203.91 **
Major level: 203.13 HIT
Minor level: 202.35 **
Minor level: 200.78
Major level: 200.00
Minor level: 199.22
Minor level: 197.77
Major level: 196.88
The QQQ closed at 204.98. A close above 203.91 and the QQQ should test the 206.26 level.
203.13 should be major support.
203.70 is a minor technical support level. Watch for support at this level on a pullback.
IWM:
Major level: 168.75
Minor level: 167.19
Minor level: 164.06
Major level: 162.50 Hit
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 162.56. The IWM continues to trade right at the major 162.50 level.
Watch the minor 164.06 on the upside and 160.94 on the downside.
Minor technical support is now at 162.
Short term charts remain bullish, so momentum is still bullish.
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 139.75. Watch the major 140.63 level. If the TLT can clear this level, it should head higher.
139 is technical support. And major support is at 137.50.
GLD:
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
Major level: 134.38
The GLD closed at 138.92. A close today above 138.28 and the GLD should move up to 140.63. Watch the 140.63 level on the upside. The GLD needs to clear it to head higher.
A break under the major 137.50 level and it should head lower.
The key technical level is 139. If the GLD cannot clear 139, I would expect it to drop.
The key level is 134.38 on the downside. If the GLD has two closes under this level, it could drop to 125.
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 59.67. The XLE closed back above the major 59.38 level.
At this point, the minor 60.16 level is the key level on the upside. Two closes above this level and it should head up to 62.50.
59.38 should be support and technical support is also at 59.38. So, you know if the XLE breaks under this level, it will head lower.
The daily chart is getting close to crossing into an uptrend.
AAPL:
Major level: 281.25
Minor level: 277.35
Minor level: 269.54 **
Major level: 265.63 HIT!
Minor level: 261.72
Minor level: 253.91
Major level: 250.00
Minor level: 246.88
Minor level: 240.63
Major level: 237.50
Apple closed at 270.77. A close today above 269.54 would confirm a move up to 281.
Watch the major 265.63 level. If this level cannot hold as support, I would expect a drop to 261.72.
Technical support should now be in the 267 area. Short term trends are bullish.
WATCH LIST:
Bullish Stocks: CMG, SHOP, HUM, MLM, ZBRA, VRTX, BABA, CME, AMP, MSFT, HSY, UHS, KMB, ALNY, RCL, DRI, EA
Bearish Stocks: FDX, AAP, FFIV, XLNX, PLCE, CXS, SAGE, ALB, OLLI
Be sure to check earnings release dates.
