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 $14.54
Premium Collected - $1.65
TEVA Long $18.06
Premium collected - $1.46
Short May 11th - $19 Call @ $.36
KMI Long September $16 call @ $1.00
ADTN Long August $15 Call @ $.75
ADTN Short August $17 Call @ $.35
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Friday, you should have closed out two positions. The first was executed on your behalf automatically. The short $19 call on TEVA settled in the money on Friday, therefore they should have been assigned on the call and sold your shares at $19.
The end result, including the sale of call options was an overall gain of $2.40 per share. This works out to a 13.2% return for about a month.
The second position was the close out of the debit spread spread on ADTN. The end result on that position was a cash return of $360 on the suggested 12 lot. On a percentage basis, it was a return of 75% for one week.
Now back to the markets.
The S & P 500 closed out Friday at 2,727.72. The market was up slightly on the day. It was up 4.65 points for the day.
And the range for the day contracted. The range was only 15.41 points and the daily price action formed a doji bar. The average true range is now 34.07. So, Friday's range was less than one half the average.
The narrow range trading, along with a doji bar tells us two things. The first is that we should expect an expansion. As you know, an expansion usually follows a contraction. The second is that the doji bar warns us of a possible change in direction.
And add to the fact that the VIX is back down to its historic low, we need to be mindful that a reversal could occur.
The objective is to 2,734.40 for the S & P 500 and Friday's high of 2,732.86 came within 1.54 points of that objective. And this morning, the S & P 500 is trading about 3 points higher before the open, so we should take out the objective.
If the market opens above the 2,734.40 level, that would indicate that Friday's close should be a point of support. And the downside level of 2,714.85 should also offer support.
For the week, the market closed 64.30 points higher. And it closed at 93.4% of the range of the weekly bar. This suggests there is a high probability that last week's high will be violated for the low.
And for the week, the range was about the average true range. The range for the week was 77.66. And the average true range is 78.71.
Support from last week's weekly bar should be in the 2,694 to 2,698 area.
Continue to monitor the longer term levels for the market.
Here are the Key Levels for the Markets:
$VIX:
Major level: 31.25
Minor level: 29.69
Minor level: 26.56
Major level: 25.00
Minor level: 23.44
Minor level: 20.31
Major level: 18.75 <
Minor level: 17.19 **
Minor level: 14.06
Major level: 12.50
Minor level: 10.94
The VIX closed at 12.65, which was the low for the day. This puts the VIX within 15 cents of the 12.50 objective.
I am biased for a bounce at 12.50. However, if the VIX breaks under the 12.50 level expect it to continue lower and the marekts to head higher.
Minor resistance should still be at 14.06.
$SPX:
Major level: 2,812.50
Minor level: 2,792.98
Minor level: 2,753.93
Major level: 2,734.40
Minor level: 2,714.88
Minor level: 2,675.83 **
Major level: 2,656.30 <
Minor level: 2,636.75
Minor level: 2,597.65
Major level: 2,578.10
Minor level: 2,558.58
Watch to see if the S & P 500 can clear the 2,734.40 level, which is the objective. Minor resistance is at 2,744.10.
Support should be at 2,714.88.
Friday's close of 2,727.72 should also be watched today.
QQQ:
Major level: 175.00 <
Minor level: 171.88
Minor level: 165.63 **
Major level: 162.50
Minor level: 159.38
Minor level: 153.13
Major level: 150.00
Minor level: 146.88
Minor level: 140.63
Major level: 137.50
The QQQ closed at 169.46. The objective should be still be up to 175. However, like the S & P 500 on Friday, the QQQ formed a doji bar.
Watch Friday's high of 169.86 and the close.
168.75 should offer strong support. And 171.88 could offer some resistance.
IWM:
Major level: 162.50
Minor level: 161.72
Minor level: 160.16
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
The IWM closed at 159.84. The IWM closed above the 159.38 objective again.
The next level to the upside is 160.16. 158.38 should offer minor support. And minor resistance is at 160.94. 159.38 should offer support.
TLT:
Minor level: 121.49
Minor level: 120.70
Major level: 120.31
Minor level: 119.92
Minor level: 119.14
Major level: 118.75 <
Minor level: 118.36 **
Minor level: 117.58
Major level: 117.19
Minor level: 116.80
Minor level: 116.02
Major level: 115.63
The TLT closed at 119.23. The TLT closed again above the 118.75 level.
118.95 should offer minor support. And look for the TLT to continue higher, if it can hold the 118.75 level. And a close today above 119.14 and the TLT should test 120.31.
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: 124.61 **
Minor level: 123.83
Major level: 123.44 <
The GLD closed exactly on the 125 level. The GLD has now for about two weeks around the 125 level.
Wait for a break under or above the 125 level. That should tell us the direction of the next minor move.
XLE:
Major level: 78.13 <
Minor level: 77.35
Minor level: 75.78 **
Major level: 75.00
Minor level: 74.22
Minor level: 72.66
Major level: 71.88
The XLE closed at 76.73. The objective should now be to 78.13.
75 should offer major support. And 75.78 should offer minor support.
FXY:
Minor level: 89.26
Major level: 89.06
Minor level: 88.87
Minor level: 88.48
Major level: 88.28 <
Minor level: 88.09
Minor level: 87.70 **
Major level: 87.50
Minor level: 87.31
Minor level: 86.92
Major level: 86.72
The FXY closed at 87.65. The FXY is bouncing from an oversold condition.
87.50 should now offer strong support. To move higher, the FXY will need two closes above 87.70.
AAPL:
Major level: 193.75
Minor level: 192.19
Minor level: 189.06
Major level: 187.50
Minor level: 185.94
Minor level: 182.81 **
Major level: 181.25
Minor level: 179.69
Minor level: 176.56
Major level: 175.00
Apple closed at 188.59. A close today above 189.06 and look for Apple to hit 193.75.
Apple is overbought short term.
Apple has moved into an uptrend on the 60 minute chart and is in an uptrend on the 30 minute chart. A sell off would be an opportunity to go long.
WATCH LIST:
Bullish Stocks: AMZN, GOOGL, BA, GWW, ALGN, BIDU, NVDA, ILMN, ADBE, PAN, BABA, AAPL, BLUE, RHT, CAT, ACN, ADSK, CR, CVX
Bearish Stocks: CHTR, DTE, THO, BUD, CELG, AEP, D, UAL, PZZA, LB, JD
Be sure to check earnings release dates.