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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UNIT Short Feb 21st Call @ $0.30
KEX Long (2) Mar 20th - $75.00 calls @ $2.60
KEX Long (1) Mar 20th - $75.00 put @ $3.10
IRBT Long (2) Feb 28th - $52.50 calls @ $2.40
IRBT Long (1) Feb 28th - $52.50 put @ $2.50
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As a reminder, all markets are closed Monday for Presidents Day.
After the pause on Tuesday, the market made a strong move yesterday. This followed the contraction from Tuesday.
The S &P 500 closed 21.70 points higher on the day. The day closed out at 3,379.45.
But, the day contracted again. The daily range was only 11.75 points. The range was just under 40% of the daily average true range.
The day closed at 83% of the daily bar. This does give the nod to the high being violated before the low.
But, pre open the market is selling off.
As I write this, the S & P is trading about 19 points lower.
Assuming this trading holds up through the open, the market should open around 3,360. This would be about 10 points below Wednesday's low.
The low would then be resistance on a rally. The low is 3,369.72.
If this level is violated, lool for resistance around 3,375.
I have been writing about the fact that the S & P is right up against the extreme bollinger band on its daily chart.
That price level is 3,391 and yesterday's high came to within 10 points of it.
Today's pre open selling suggests that the market will move away from the upper band.
This measurement tells us that the market is at an extreme.
BABA reported and is trading about $7 lower. ZBRA is down about $10 after reporting.
This afternoon we will hear from NVDA and EXPE. ROKU also reports Thursday 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
Minor level: 10.16
Major level: 9.38
The VIX closed Friday at 13.74. The VIX dropped 1.44 and closed under 14.85 for the first time.
Watch this level today. A close today under this level and the VIX should drop to 12.50.
The VIX would have to clear 14.85 today for a pullback to happen.
The divergence from Tuesday could indicate another quick pullback will happen.
S & P 500:
Major level: 3,427.40 <
Minor level: 3,398.35
Minor level: 3,320.25 **
Major level: 3,281.20
Minor level: 3,242.15
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
The S & P closed at 3,379.45. The S & P closed just under the minor 3,378 resistance level.
At this point, the minor 3,359 level should offer support. And the projected open should be right around this level.
Watch to see if it can hold. If it can't, I would expect a further drop in the market.
The 3,370 area should offer technical support.
QQQ:
Major level: 234.38
Minor level: 233.60 **
Minor level: 232.03
Major level: 231.25
Minor level: 230.48
Minor level: 228.91
Major level: 228.13
Minor level: 227.35
Minor level: 225.78
Major level: 225.00
Minor level: 224.22
Minor level: 222.69
Major level: 221.91
The QQQ closed at 234.27. The QQQ hit the 234.38 objective we were looking for.
Yesterday's high was exactly 234.38! As you know, I look at these targets and objectives as areas, but there are times when price stops right on them and this is one of them.
Watch the minor 233.60 level today. The QQQ will need to clsoe under this level for a pullback to happen.
Also, the upper band is 230.02, which should be support until price closes under it.
Technical support is around 233. And the 234 area should be resistance.
IWM:
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: 160.94
Minor level: 157.81
Major level: 156.25
Minor level: 154.69
Minor level: 151.56
Major level: 150.00
The IWM closed at 168.11. The IWM should test 168.75. And the iWM got to within 45 cents of it.
The IWM moved above the midband on the 60 minute chart. The midband is 165.80. The IWM is still trading above it, so it should be support. But, the 60 minute chart is bearish.
The 164 level should also offer support.
TLT:
Major level: 146.88
Minor level: 146.10
Minor level: 144.53 **
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
The TLT closed at 143.37. The TLT closed back under 144.53. It will have to reclaim this level today, to move higher.
Watch the 143.60 area. The TLT will need toc lear this level to move higher.
GLD:
Major level: 150.00
Minor level: 149.22
Minor level: 147.67 **
Major level: 146.89 <
Minor level: 146.11
Minor level: 144.54
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
The GLD closed at 147.54. The GLD will have to reclaim 147.67 to move higher. And at this point, it is just under it.
The 147 area should be technical support. A break under it and the GLD should head lower.
Momentum is still to the upside, but a break under 147.50 and look for the GLD to continue 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: 55.47
Minor level: 53.90 **
Major level: 53.12 <
Minor level: 52.34
Minor level: 50.78
Major level: 50.00
The XLE closed at 55.04. The XLE should make a push up to 56.25.
53.78 is a key support level. If this can hold, look for the XLE to continue to bounce. If it can't, look for a further drop.
Technical resistance should be around 58. And support around 54.
The XLE bounced, as we expected. The question is how far can it bounce?
AAPL:
Minor level: 334.38
Minor level: 328.13
Major level: 325.00 <
Minor level: 321.88 **
Minor level: 315.63
Major level: 312.50
Minor level: 309.38
Minor level: 303.13
Major level: 300.00
Minor level: 296.88
Minor level: 290.63
Major level: 287.50
Minor level: 284.38
Apple closed at 327.20. Apple managed to close above the minor 321.88 level. A close today above this level and Apple should mvoe up to 325.
The upper band is 337 and is the level to watch on the upside.
The 321 area should offer technical support on a pullback. If this level holds, look for a move higher.
WATCH LIST:
Bullish Stocks: TSLA, SHOP, LMT, ADBE, BIIB, MA, LRCX, COST, CTAS, VRTX, HD, LHX, RETA, SYK, ADSK, VRSK, CB, SPLK, UTX
Bearish Stocks: LEA, DLTR, PVH, XOM, GRA, LNG, OLLI, CLB, CARG,
