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
SNAP Long at $15.20
Short Jan 12- $15.50 Call @ $0.31
Premium Collected - $3.55
AMC Long at $15.27
Short January $16 Call @ $0.27
Premium Collected - $2.25
UNIT Long at $17
Short January $17.50 Call @ $0.35
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It didn't long for the S & P 500 to take out the 2,734.40 objective. Since reversing on the 2nd of January, the market ran virtually straight up to take out the 2,734.40 line.
As I have been saying, I felt the 2,734.40 should offer some resistance and quite frankly, it didn't. The fact that it didn't, suggests that 2,812 should be achieved.
The question for us is could we have anticipated this fast move?
The week's ended December 22nd and December 29th, both had range contractions.
The ranges for those two weeks were 18.86 and 18.51 points, respectively.
Last week certainly expanded after the two contractions. The range for the week was 61.09 points.
Once again, it shows how the market should expand after a series of contractions.
But quite frankly, it is difficult to go long after the run this market has made, but the logic was on the longside. At the very least, the logic with the contraction prevented you from thinking about a short.
Support from last week's weekly price bar is in the 2,713 area. This is about 30 points below where the market closed Friday.
I do need to mention that the S & P 500 is right up against the upper band on its daily chart. The upper band is 2,744.92. The upper band on the weekly chart s 2,743.15.
By using the measurements of the extreme bollinger bands, you can see how overbought the market is.
There is one position that expires this Friday and that is the short $15.50 call on SNAP.
Continue to follow the resistance levels.
Here are the Key Levels for the Markets:
$VIX:
Major level: 14.06
Minor level: 13.67
Minor level: 12.89
Major level: 12.50
Minor level: 12.11
Minor level: 11.33 **
Major level: 10.94 <
Minor level: 10.55
Minor level: 10.16
Major level: 9.38
Minor level: 8.99
Minor level: 8.20
Major level: 7.81
The VIX close at 9.19. Friday was the third day where the VIX closed under 9.38.
To move higher, the VIX will need two closes above 10.16. 9.38 should continue to offer resistance.
$SPX:
Major level: 2,812.50
Minor level: 2,792.98
Minor level: 2,753.93 **
Major level: 2,734.40 <
Minor level: 2,724.23
Minor level: 2,705.07
Major level: 2,695.30
Minor level: 2,685.55
Minor level: 2,666.05
Major level: 2,656.30
Minor level: 2,646.53
The S & P 500 closed at 2,743.15, taking out the 2,734.40 objective.
To move higher, the S & P 500 will need two closes above 2,753.93.
Support should now be at 2,734.40. Resistance should be at 2,775.
QQQ:
Major level: 162.50
Minor level: 160.94
Minor level: 157.81 **
Major level: 156.25
Minor level: 155.47
Minor level: 153.91
Major level: 153.13
Minor level: 152.34
Minor level: 150.78
Major level: 150.00
The QQQ closed at 161.92. The objective for the QQQ should be the 162.50 level. Friday's high was within 50 cents of the objective.
I feel that the ultimate objective for the QQQ is 175.
160.94 should be minor support.
IWM:
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: 147.66
Major level: 146.88
The IWM closed at 154.79. The objective should still be to 156.25.
154.30 should offer support. And 153.91 should also be minor support.
TLT:
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: 124.61
Minor level: 123.83
Major level: 123.44
Minor level: 123.05
The TLT closed at 125.71. The TLT should test 128.13 again.
Support should be at 125.39 and 125.
GLD:
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: 121.10
Minor level: 119.53
Major level: 118.75
Minor level: 117.96
The GLD closed at 125.33. The GLD did manage to close back above 125.
125 is a key level for the GLD. A straddle could be the strategy at the moment.
A failure and the GLD could drop to 112. A breakout and the GLD could run to 137.
XLE:
Major level: 76.56
Minor level: 76.17
Minor level: 75.39
Major level: 75.00 <
Minor level: 74.61
Minor level: 73.83
Major level: 73.44
Minor level: 72.66
Minor level: 71.09
Major level: 70.31
Minor level: 69.92
The XLE continues to trade right around the 75 level. The XLE is overbought short term. But, it has moved into an uptrend on the daily chart.
The next minor level to the upside is 75.39. Watch to see if the XLE can clear this level.
On a pullback, I would not expect the XLE to drop below 71.88.
These levels should offer support on a pullback.
FXY:
Major level: 86.72
Minor level: 86.53
Minor level: 86.14
Major level: 85.94
Minor level: 85.75
Minor level: 85.36 **
Major level: 85.16 <
Minor level: 84.96
Minor level: 84.55
Major level: 84.38
The FXY closed at 84.84. With a close today under 84.96, I would expect a retest of 84.38.
84.38 should offer support.
AAPL:
Major levels for Apple are 175, 171.88, 168.75, 165.63, 162.50, and 159.38.
Apple closed at 175, which is the level I felt that Apple would retest.
Two closes above 175.78 and Apple should test 178.13.
WATCH LIST:
Bullish Stocks: AMZN, GOOGL, BIIB, LMT, HUM, DIA, BIDU, HD, FB, AMGN, SWK, LH, DE, VRTX, PANW, NSC, COL
Bearish Stocks: SLG, EPR, HCN DXCM, AIV, HTA
Be sure to check earnings release dates.
