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
UNIT Long at $17.00
Premium Collected - $0.35
VRX Long at $16.40
Premium Collected - $0.79
Short April 20th-$16.50 call @ $0.29
SNAP Long at $14.54
Short April 13th-$15 call @ $0.30
Premium Collected - $0.30
KMI Long September $15 call @ $1.10
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As I mentioned yesterday, if you have been following the alerts, you should have one position that expires tomorrow. And that is the short $15 call on SNAP. SNAP closed yesterday at 14.80, so it is very close to the strike price. I will send a separate email tomorrow if the position is adjusted.
Now back to the market.
The S & P 500 closed at 2, 642.19. It dropped 14.68 points on the day.
The intraday range was only 22.18 points. As compared to the average true range of 48.72 points, you can see that the range for the day was about one half the average.
And yesterday also an inside day. As you know, this forms when the price bar has a lower high and a higher low.
This contraction, along with an inside day tells us to expect an expansion.
So, let's try and project where the market could top out or bottom out.
If we look at the weekly chart, so far this week, the range for the week is about 55 points.
And the low for the week is 2610.79. The weekly average true range is 79 points. So, if I add the average to this week's low, the market potentially tops out at 2689.68.
With a close yesterday at 2642.19, it would mean the market could move about 47 points in two days.
Is this realistic?
I'd say so. With a daily average true range of 49 points, this could happen on one day.
Is this infallible?
No, not at all. But it does us a framework that gives us logical projections based on recent trade history.
The point is simply this. We know that the market contracted and that usually an expansion will follow. It does not mean that it will happen today. But, it will happen and that we can bank on.
The levels from yesterday's daily price to watch are 2,642 and 2,650.
Pre open the S & P 500 is trading about 13 points to the upside. This projects an open at about 2,655.
If the market does pullback, look for support at 2,642 and 2,650.
Tomorrow we will get earnings from a few of the big banks, including C, JPM and WFC.
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 20.24 yesterday. It closed .23 points to the downside. A close today under 20.31 implies a drop to 18.75.
Also, the minor 21.09 level should also help to confirm a drop in the VIX. 21.09 should now be resistance and if the VIX stays under this level today, it will also help to confirm a drop to 18.75.
$SPX:
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
Minor level: 2,519.53
Major level: 2,500.00
The S & P 500 closed at 2,642.19. Support should still be at the 2,636 level. IF the market breaks under 2,636, I would expect the minor 2,627 level to hold.
If the S & P 500 can clear 2,651, look for support at that level.
QQQ:
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 160.28. Minor support should now be at 159.38 and 157.81.
The 159.38 level should continue to be support. If it can't, look for the QQQ to move lower.
IWM:
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 153.71. Look for 153.13 to act as support. On the upside, resistance could come in at 156.25.
Technical support is also right at the midband on the 60 minute chart, which happens to be 153.63.
TLT:
Major level: 123.44
Minor level: 123.05
Minor level: 122.27
Major level: 121.88 **
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
The TLT closed at 121.51. Yesterday's high was 121.89 or one cent above the major 121.88 level.
At this point, I would expect a pullback off the 121.88 level. But, I would not expect a pullback to drop below the 118.75 level.
GLD:
Major level: 134.38
Minor level: 133.60
Minor level: 132.03
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
The GLD closed at 128.11. If the GLD cannot close above 128.13, I would expect a pullback. If it can close above 128.13, the GLD could rise to as high as 138.
125 should be support.
XLE:
Minor level: 76.95
Major level: 76.56
Minor level: 76.17
Minor level: 75.39
Major level: 75.00
Minor level: 74.22
Minor level: 72.66
Major level: 71.88
Minor level: 71.10
Minor level: 69.53 **
Major level: 68.75
Minor level: 67.97
Minor level: 66.41
Major level: 65.63
The XLE closed at 70.64. With a close above 69.53 yesterday, the XLE should test 71.88.
At this point, I am looking for a move up to the 75 - 76 area.
FXY:
Major level: 90.63
Minor level: 90.43
Minor level: 90.04
Major level: 89.84 <
Minor level: 89.65
Minor level: 89.26
Major level: 89.06
The FXY closed at 89.70. Watch for resistance at 89.84. A break under 89.06 and the FXY should continue lower.
AAPL:
Minor level: 178.91
Major level: 178.13
Minor level: 177.35
Minor level: 175.78
Major level: 175.00
Minor level: 173.44
Minor level: 170.31 **
Major level: 168.75 <
Minor level: 167.19
Minor level: 164.06
Major level: 162.50
Apple closed at 172.44. The 168.75 level should offer major support at this point. If Apple does close under 168.75 for two days, it could drop to 150.
So, watch to see if the major 168.75 holds.
171.88 should be minor support.
WATCH LIST:
Bullish Stocks: HUM, MCD, PVH, BURL, RL, KSU, CLB, PSX, VLO, LULU, YUM, KORS, LEN, COP, CLR, APC, HFC, MTH
Bearish Stocks: AVGO, ADS, WHR, CB, ALXN, DGX, WST, MDT, TAP, WBA, CERN, LUV, CTRP. ALKS, CRUS, BEN
Be sure to check earnings release dates.