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
SNAP Long at $15.20
PANW Long Oct $145 Call at $2.44
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The S & P 500 managed another narrow range day yesterday, with a total range for the day of 8.39 points. It managed to close .18 points to the upside, at 2,496.84.
With the average true range at 11.95, this is certainly another contraction.
Is this the new norm?
The market makes a few days of strong moves and then pauses for a few days. This seems to be the pattern over the last year or two.
It is tough to make serious commitments when the market is hovering around all time highs and the VIX is at all time lows.
And you tend to get lulled into thinking that shorting is the best scenario. But it's not.
If you are trading on a short term or intra day basis, your best chance for profit will be to trade in the direction of the trend on the 30 and 60 minute charts.
For the S & P 500, those trends remain bullish, so your best chance for profit will be to go long.
Yesterday, the SPY gapped up and ran out of steam around 249.70. From there it dropped to a low of 248.80.
From there it ran back up to retest the high and made it to 249.49. That was a move of .69 points in a few hours. Not a huge move, but at least you were on the right side of the market.
I had a friend tell me yesterday he got short on Friday and was hoping to close out yesterday at a profit.
I asked why he went short and he said he thought the market looked it was going to go lower.
My answer to him was to simply look at the trend direction on the 30 and 60 minute charts and that told you not to consider shorting.
Staying with the longest term intra day trends can keep you out of trouble.
Pre open, the S & P 500 is trading slightly to the upside, so a higher open is expected.
Continue to follow the resistance levels.
Here are the Key Levels for the Markets:
$VIX:
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 <
Minor level: 8.60
Minor level: 7.03
Major level: 6.25
The VIX closed at 10.17, just one cent above the 10.16 level that I mentioned yesterday that should get retested.
This now implies that if the VIX closes above 10.16 today, it could run to 12.50. I would still expect strong resistance at 12.50. And 10.94 could offer resistance as well.
$SPX:
Major level: 2,539.10
Minor level: 2,529.33
Minor level: 2,509.78 **
Major level: 2,500.00
Minor level: 2,492.20 **
Minor level: 2,476.00
Major level: 2,468.80
Minor level: 2,460.98
Minor level: 2,445.33
Major level: 2,437.50
The S & P 500 continues to trade around the major 2,500 level. Because the market got through 2,500, I am still biased to the upside and would expect another run through 2,500.
Minor support is at the 2,494 to 2,496 area. Minor resistance is still at 2,505.
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 closed at 143.17. If the QQQ clears 143.75, look to see if it can get through 144.53.
142.97 should offer support.
IWM:
Major level: 146.88 <
Minor level: 145.32
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
The IWM closed at 144.61. A close today above 144.53 implies a move up to 146.88.
Major support should be at 143.75. Minor support is at 144.14.
Short term charts remain bullish.
TLT:
Major level: 131.25
Major level: 130.47
Minor level: 128.91
Major level: 128.13
Minor level: 127.35
Minor level: 125.78 <
Major level: 125.00
The TLT closed at 126.76. The objective should still be to 128.13.
126.56 should be support. Resistance is at 127.73. If the TLT can hold 126.56, expect it to head higher.
GLD:
Major level: 131.25
Minor level: 130.47
Minor level: 128.91
Major level: 128.13
Minor level: 127.35
Minor level: 125.78
Major level: 125.00 <
Minor level: 124.22 **
Minor level: 122.66
Major level: 121.88 <
Minor level: 120.32
The GLD closed at 123.14. A close today under 124.22 implies a move down to 121.88.
123.83 should be minor resistance.
XLE:
Major level: 68.76 **
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
Minor level: 60.16
Major level: 59.38
The XLE closed at 68.14. The objective should be to 68.76.
Support should now be at 67.58. 69.53 is resistance.
The XLE held above the midband, which is 67.71.
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
The FXY closed at 85.59. 85.55 should be a support level. If this cannot hold, look for the FXY to drop to around 84.
85.35 is minor support and 85.94 should be resistance.
AAPL:
Major levels for Apple are 165.63, 162.50, 159.38, 156.25, 153.13, and 150.
Apple bounced as expected. Look for support around 152.80 on a retest.
Apple was under the lower bands on its 30 & 60 minute charts, which indicates a severe oversold condition.
WATCH LIST:
Bullish Stocks: GOOGL, LMT, NOC, BA, BIDU, FDX, GD, DPZ, LLL, NFLX, ALGN, RTN, MCO, CAT, MON, ALB, CME,
Bearish Stocks: WBA, DXCM, K, LULU, UAL, GIS, TCO, CPB, FNSR
Be sure to check earnings release dates.
