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.
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
DYN Long at $12.55
Premium Collected $0.48
APA Long Oct $47.50 Call at $3.45
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Yesterday, the S & P 500 opened just under the minor 2,468.80 level, at 2,468.63. It rallied up to a high of almost 2,475 before heading back down to close under 2,468.80, at 2,468.11.
Not closing above the minor level leads me to believe the market will test the 2,460.90 level. This is a key minor level because if the S & P 500 closes under that level for two days, I would expect a retest of 2,437.50.
I brought up the fact that on the 30 minute chart for the S & P 500 ,which is still in a downtrend, price was trading before the open under the mid band. the midband before the open was 2,470.57.
I also mentioned that if should offer resistance and clearing that level would be bullish. Yesterday, the market got just above but failed to close above it, so it did offer the expected resistance.
That level is now 2,470.40 and the S & P 500 closed under it, as well as the minor 2,476.60 level.
We also have the scenario where price had dropped under the lower band on the 30 minute back on the 10th and the 11th. So, a retest of the lower band would not be out of the question. There is also the bullish gap on the 14th, which tends to me a price target on a pullback.
The lower band level on the 30 minute chart is 2,445.74. And one half the bullish gap is 2,450. The high of the bar prior to the gap is right at the lower band, so you should expect strong support there on a pullback.
There is also a short term resistance level at 2,445.30.
Yesterday's price action formed a doji bar, where the open is approximately the close.
As you know, this can mean indecision. But, it can also mean a pause before the move continues.
Pre open, the market should open lower, which would mean that 2,468.80 should most likely be tested early. A failure to get through level would mean the market should head lower. Most likely to the levels I mentioned above.
You should have closed out the weekly calls on WDC yesterday. If you did not execute the alert immediately, you most likely received a better fill than stated in the alert. I am sure your not used to that, but selling into strength can do that.
Continue to follow the resistance levels.
Here are the Key Levels for the Markets:
$VIX:
Major level: 18.75
Minor level: 17.97
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: 10.16 **
Major level: 9.38 <
The VIX closed at 11.74, under the 12.50 level. To move lower, the VIX will need two closes under 11.72.
10.94 is still the minor level on the downside. Two closes under 10.94 and the VIX should drop to 8. (And possibly to 6.25, which would be historic.)
$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: 2,375.50
Minor level: 2,359.38
Minor level: 2,328.12
Major level: 2,312.50
The objective is now back up to 2,500 again. The S & P 500 is now trading between the major 2,500 and 2,437.50 levels.
2,453.12 is a minor level of support. And you have other area of support from above.
Watch the minor levels I mentioned above.
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
The QQQ close again above the 143.75 level.
143.75 should offer support. If that does not hold, I would expect 142.97 to.
144.53 is still minor resistance.
IWM:
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: 136.72
Minor level: 135.15
Major level: 134.37
The IWM closed again just under the major 137.50 level. It closed at 137.44.
If it cannot clear this level, watch the 135.94 level. Two closed under 135.94 and the IWM would drop to 131.
To move higher, it will now need two closes above 138.28.
TLT:
Major level: 128.13
Minor level: 127.74
Minor level: 126.95
Major level: 126.56 <
Minor level: 126.17 **
Minor level: 125.39
Major level: 125.00
Minor level: 124.61
Minor level: 123.83
The TLT reversed and closed at 125.71. This now sets up a scenario where if the TLT can close above 125.39 today, it should move up to 126.56.
125 should be major support, so if it breaks under that level, it should head lower. 125.39 is minor support.
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
Like the TLT, the GLD reversed and closed at 121.87.Just one cent under 121.88.
123.44 should offer resistance. And 121.09 should be minor 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 is now within 40 cents of the 62.50 objective.
62.89 is a minor support level and major support should be at 62.50.
On the downside, 61.72 is the key price level. I do not expect it to be violated, but if it is, expect the XLE to head lower.
FXY:
Major level: 89.06
Minor level: 88.67
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
Strong reversal yesterday on the FXY, with it closing at 87.25.
86.91 should be minor support. If it can clear 87.50, I would expect it to continue higher.
The FXY is now at a key inflection point. In fact a straddle here makes sense.
AAPL:
Major levels for Apple are 162.50, 159.38, 156.25, 153.13, and 150.
We were looking for an objective of 162.50 and yesterday's high was 162.51. Objective hit!
Support should be at 159.38. Clearing or not clearing 162.50 should indicate the next minor move for Apple.
Minor support should be at 160.16 and 159.38.
WATCH LIST:
Bullish Stocks: LMT, RTN, ALGN, COL, KITE, EL,DG, WEC, AZPN, GRUB, ERJ, MFA
Bearish Stocks: PANW, IBM, FLT, PANW, BWLD, CLB, VRSK, ESRX, WES, PAYX, AKAM, SGEN, LB, FLR
Be sure to check earnings release dates.
