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 $1.06
ET Long at $11.78
Premium Collected $0.35
DBX Long at $19.70
Premium Collected $0.50
ET Long at $7.50
ET Short March 20th - $8 Call @ $0.60
AGNC Long at $13.19
AGNC Short March 13th - $13.50 Call @ $0.40
SNAP Long at $8.90
SNAP Short March 20th - $9 Call @ $0.58
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Today is triple witching day. This occurs four times a year and is when options, futures and options on future contract all expire on the same day.
I mention this because this day typically brings with it added volatility as positions are adjusted.
As if this market needs something else to add more volatility to it.
I have been writing about how oversold the S & P 500 is ... and how I was looking for a possible short term bottom in the market yesterday.
This was because it was the one month anniversary of the top and as you know, the S & P was trading below the lower band on its daily chart.
Well technically, the S & P did not make a lower low yesterday and as it stands for now, the low was on Wednesday.
This is one of the reasons I suggested a few new positions.
So, for today, there are three short call positions that expire today.
The first is the short $8 call on ET. Even though ET bounced almost 20% yesterday, it is still well short of the $8 strike.
The second short call is the $13.50 call on AGNC. This call should also expire today.
And finally, I suggested a new weekly call on SNAP yesterday. I suggested buying SNAP just under $9 and selling the $9 call that expires today. It looks like SNAP will expire in the money, so allow the calls to be assigned.
If any position needs adjusting, you will receive a separate email.
But, the S & P did manage to close higher yesterday. With this pandemic wreaking total chaos on the markets, this is a good sign.
The day closed out 11.29 points higher, at 2,409.39. And the daily bar closed at 61% of the range, which does suggest yesterday's high of 2,466.97 should be violated before the low of 2,319.78.
And the support area from yesterday's daily price bar is in the 2,393 to 2,401 area.
The question is what would a short term bottom look like?
Well, first of all, I would expect the S & P to close above its lower band on its 60 minute and daily charts.
The S & P did manage to close above the lower band on the 60 minute chart. That level is 2,255.68 and the S & P closed about 150 points above it.
The S & P would also need to close above the lower band on the daily chart, which is 2,552.32. Yesterday's high was about 85 points below the lower band.
The extreme bands tell us how oversold or overbought a market is.
To give you an idea of how oversold the market is, if I run a scan of the stocks trading under their lower bands, the results return 999 stocks.
And I would suspect there are more. At stockcharts, where I run scans, it limits the results to 999. So, it is quite possible there are a lot more than 999.
In taking a quick look at how the weekly price bar is forming, we see that it has already exceeded the weekly average true range, which is 155.41.
The weekly range through yesterday is 282 points or 182% of the average. So, it is possible the range for the week is already in. And I suspect it is.
The midpoint of the weekly price bar so far is 2,421.75 and yesterday closed at 2,409.39 or about 11 points below the midpont.
If the weekly price bar can close above 2,409.39, we should see a multi day bounce.
But, on the upside, we have the midband as resistance, which is 2,513.47.
Clearing the midband would be bullish.
At this point, it is too premature to write about where a bounce could go. If the S & P can close above the lower band on the daily bar, I will share where the bounce could go.
Here are the Key Levels for the Markets:
$VIX:
Major level: 40.62
Minor level: 39.84 **
Minor level: 38.28
Major level: 37.50
Minor level: 36.72
Minor level: 35.16
Major level: 34.38
Minor level: 33.60
Minor level: 32.03
The VIX closed at 72. The VIX closed 4.45 points lower on the day.
The VIX is still trading well above the upper band on the daily chart, which is 44.96.
The upper band on the 60 minute chart is 88.40. This level should be resistance.
If the VIX clears this level today, expect it to go higher. This level needs to hold as resistance for the market to move higher.
A break under 72 and the VIX should continue lower.
S & P 500:
Minor level: 3,007.85
Major level: 2,968.80
Minor level: 2,929.75
Minor level: 2,851.65
Major level: 2,812.50
Minor level: 2,773.45
Minor level: 2,695.35
Major level: 2,656.30
Minor level: 2,617.25
Minor level: 2,539.06
Major level: 2,500.00
Minor level: 2,460.95
Minor level: 2,382.85 **
Major level: 2,304.75
Minor level: 2,226.65
The S & P closed at 2,409.39. At this point, watch the minor 2,382.85 level again today.
A close today above 2,382.85 and the S & P should move up to 2,500.
The S & P should open about 10 points higher. Hopefully, we can hold onto these gains and gains some positive traction.
The market has not been about to close higher for two consecutive days in a row since February 11th.
The lower band on the 60 minute chart is 2,255.68. Watch this level on a pullback.
QQQ:
Minor level: 214.87
Minor level: 213.30
Major level: 212.50
Minor level: 211.72 **
Minor level: 210.16
Major level: 209.38 <
Minor level: 208.60
Minor level: 207.03
Major level: 206.25
Minor level: 205.47
Minor level: 203.91
Major level: 203.13
Minor level: 202.35
Minor level: 202.35
Major level: 200.00
The QQQ closed at 177.66. The lower band on the 60 minute chart is 165. Watch this level today on a pullback.
The major 175 level should offer support. And support from the daily bar is around 176.
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 <
Minor level: 148.44 **
Minor level: 145.31
Major level: 143.75
The IWM closed at 103.87. The IWM managed to close 3.9 points higher for the day.
Still trading well below the lower band on the daily chart, which is 128.18.
The lower band on the 60 minute chart is 93.176. And the IWM is just above this level. If this cannot hold, look for more selling.
TLT:
Major level: 156.25
Minor level: 155.48
Minor level: 153.91
Major level: 153.13
Minor level: 152.35
Minor level: 150.78
Major level: 150.00
Minor level: 149.22
Minor level: 147.66
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
The TLT closed at 148.28. The TLT closed 3.93 higher on the day and formed an inside day.
Watch the 140.63 level. A break under this level and the TLT should continue lower.
And watch 150 on the upside. Expect a large range today.
The midband should offer support, which is 136.
151 is the midband on the 60 minute chart and should be resistance.
GLD:
Major level: 159.38
Minor level: 158.60
Minor level: 157.03
Major level: 156.25
Minor level: 155.47 **
Minor level: 153.91 **
Major level: 153.13
Minor level: 152.35
Minor level: 150.78
Major level: 150.00
Minor level: 149.22
Minor level: 147.67
Major level: 146.89
Minor level: 146.11
The GLD closed at 138.04. Looking for a move to the midband on the daily chart, which is 137.
137.50 is the lower band on the 60 minute chart and should offer support.
150 should be resistance on the upside.
XLE:
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
Minor level: 49.22
Minor level: 47.65
Major level: 46.88
Minor level: 46.09 **
Minor level: 44.53
Major level: 43.75 <
The XLE closed at 25.61. The XLE actually reversed to the upside yesterday. It closed 1.63 higher on the day.
The XLE continues to remain oversold. The lower band on the daily chart is 40.65.
20.16 is the lower band on the 60 minute chart. And the XLE actually closed above it. Watch to see if this level holds. You know what will happen if it can't.
AAPL:
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
Minor level: 278.13
Major level: 275.00
Minor level: 271.88
Apple closed at 244.78. Apple closed $1.89 lower yesterday.
Apple is still trading above the midband on its daily chart. That level is 235.58 and Apple is still trading above it. This should be support, unless it is violated.
Still one of the stronger stocks by virtue of the fact that it is above the midband.
Apple is trading just above the lower band on its 60 minute chart. That level is 229 Watch this level today for support.
WATCH LIST:
Bullish Stocks: MASI, ERY, TNK, LAKE, DHT
Bearish Stocks: AMZN, NFLX, AVGO, ULTA, ALGN, VRSN, MCD, PANW, HON, OLED, MMM, WDAY, CMI, WEX, WIX, PYPL
