While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to 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.
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APA Long Oct $47.50 Call at $3.45
APA Short Oct $52.50 Call at $1.10
SBH Long at $19.20
VIPS Long at $11.96
VIPS Short July 28th $12 Call at $0.30
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So, after the historic close under 9.38 on Friday, the VIX managed to close above it yesterday. It closed at 9.43.
I admit that two cents is not a strong close under a level, but it did qualify. And certainly, five cents would not be considered a particularly strong close above a level, but it did recoup the 9.38 level.
This now sets ups a scenario where the VIX will still need two closes under 9.38 to drop lower.
And quite frankly, with the VIX down to historic lows, I admit it seems rather odd to look at scenarios where it could go even lower, but this bull market has been anything but normal.
And certainly looking at scenarios where the VIX could possibly go lower is even odder to me.
But, I have to stock with my system of measuring the market and the VIX.
And at this point, the 9.38 level in the VIX is the most important level I have looked at in a long time.
It is important for a few reasons. Of course, the first is that this has been a major long term support level for the VIX. I mentioned a few days back that the bear market of 2007 began when the VIX dropped to 9.39.
And now we have had the first close under that level. Now that it closed back above it, we still need two close under 9.38 for the VIX to drop lower.
If the VIX does close under 9.38 for two straight days, I would expect the VIX to drop to 6. And it could drop even farther.
Be sure to check earnings release dates if you intent to initiate a position.
STX reported and is set to open almost 19% to the downside this morning. Also, GOOGL should open about $28 to the downside.
Pre open, the markets are set to open to the upside. No doubt the 9.38 level in the VIX will be challenged today.
Continue to follow the resistance levels.
Here are the Key Levels for the Markets:
$VIX:
Minor level: 16.41
Major level: 15.63
Minor level: 14.84
Minor level: 13.28
Major level: 12.50
Minor level: 11.72
Minor level: 10.15 **
Major level: 9.38 <
Minor level: 8.60 **
Minor level: 7.03
Major level: 6.25
The VIX will still need two closes under 9.38 to drop to 6.
9.67 is minor resistance and 9.18 should be minor support.
$SPX:
Major level: 2,500.00
Minor level: 2,484.38
Minor level: 2,453.12 <
Major level: 2,437.50 **
Minor level: 2,421.88
Minor level: 2,390.62
Major level: 2,375.00
Minor level: 2,359.38
Minor level: 2,328.12
Major level: 2,312.50
2,500 is still the active objective. 2,468.90 should offer minor support.
And 2,484.40 could offer minor resistance. Watch to see if the S & P 500 can clear the 2,472.70 level. If it can close above 2,472.70, it should act as support.
QQQ:
Major level: 150.00
Minor level: 148.44
Minor level: 145.31 ***
Major level: 143.75 <
Minor level: 142.18
Minor level: 139.06
Major level: 137.50
Minor level: 135.94
Minor level: 132.81
To move higher, the QQQ will need two closes above 145.31. 144.92 is a minor resistance level and if the QQQ takes it out, look for it to head higher.
144.34 should be support.
IWM:
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 IWM held the 142.19 minor support level. 142.58 is a minor level as well. If this holds, I expect a move up to 143.75.
144.53 should be minor resistance.
TLT:
Major level: 126.56
Minor level: 126.17
Minor level: 125.39 **
Major level: 125.00 <<
Minor level: 124.61 **
Minor level: 123.83
Major level: 123.44
Minor level: 123.03
The TLT could not hold the 125.39 line. It drop and closed at 125.20.
125.78 should offer minor resistance. And 125 is a major support line. The TLT should open under 125, so expect that level to be resistance on a rally.
GLD:
Major level: 125.00
Minor level: 124.22
Minor level: 122.66
Major level: 121.88
Minor level: 120.32
Minor level: 119.53 **
Major level: 118.75 <<
Minor level: 117.97
The GLD closed just under 119.53, at 119.31. It will need two closes above 119.53 to move higher.
119.92 should offer minor resistance and 118.75 should be support.
XLE:
Minor level: 69.53
Major level: 68.75
Minor level: 67.97
Minor level: 66.41
Major level: 65.63 <<
Minor level: 64.85
Minor level: 63.28 **
Major level: 62.50
Minor level: 61.72
The XLE held above the 64.85 minor support level. It should test 65.63 today. And it will need to clear this level to head higher.
Short term charts remain bullish, so expect a bounce here.
FXY:
Minor level: 87.89
Major level: 87.50
Minor level: 87.11
Minor level: 86.33 **
Major level: 85.94 <
Minor level: 85.55
Minor level: 84.77
Major level: 84.38
Minor level: 83.60
Minor level: 83.20
Major level: 82.81
The FXY closed at 86.55. It is testing the 200 ema on the daily chart, which is 86.66.
87.50 should still be major resistance. The FXY came right to the minor 86.72 resistance level. If the FXY cannot clear this level, I expect it to fall back down.
AAPL:
Major levels for Apple are 153.13, 150, 146.88 143.75, and 140.63.
150.78 should be support. And a close above that level today and Apple should move up to 153.
Short term momentum is shifting to the upside. The 60 minute chart just moved into an uptrend. Buying against short support should be the strategy at this point.
WATCH LIST:
Bullish Stocks: AMZN, AVGO, BA, BDX, BIDU, NFLX, CELG, MA, UHS, LLY, CTXS, RH, CCL, KMX, RAX, NKE, EXPD, KEYS
Bearish Stocks: IBM, GPC, CVS, DXCM, HOG, SIMO, DKS, EAT, GME
Be sure to check earnings release dates.
