While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to a 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.
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The week began with weakness, as I suggested it would. For the day, the S & P 500 closed 28.19 points lower.
The market closed at 2,761.63.
This was about 40 points off the low of 2,721.17. The day closed at 66% of the range of the daily price bar.
This does suggest that yesterday's high of 2,782.46 should be violated before the low.
And with the S & P is trading about 36 points higher before the open, the high should be violated at the open.
This would suggest that the high should be support on a pullback.
The other significant technical fact about yesterday was that the intra day range was only 61.29 points. I know it sounds rather odd to say only 61.29 points when prior to this pandemic, daily ranges averaged around 22 points.
But, the range was 50% of the daily average true range, which is 122.03.
We still have overhead resistance and price levels that need to be monitored on the upside.
The main levels are the midband on the daily chart, which is 2,987.02. And the other level is the 61.8% retracement level of the whole downmove, which is 2,934.
As you know, once we held support at the lower band, the typical objective is back to the midband.
The other key at the moment is that for the past two days, the S & P managed to hold just above the midband on the 60 minute chart.
Yesterday's low actually managed to drop under it, but it managed to close above the midband.
The midband is 2,735.31 and should be support.
So, this rally began when the S & P was able to hold above the lower band, and has now managed to make it back to the midband.
The upper band on the 60 minute chart is 3,461.47. And a move up to that level would actually put the market at a new high.
But, resistance should be at the midband on the daily show. That level should tell us alot about what the market will do.
Support from yesterday's daily price bar should be in the 2,770 area.
Here are the Key Levels for the Markets:
$VIX:
Minor level: 44.53
Major level: 43.75
Minor level: 42.97 **
Minor level: 41.40
Major level: 40.62 <
Minor level: 39.84
Minor level: 38.28
Major level: 37.50
Minor level: 36.72
Minor level: 35.16
Major level: 34.38
Minor level: 33.60
Minor level: 32.03
The VIX continues to drop after closing back inside the upper band.
The VIX closed at 41.17. The VIX closed 0.50 points lower. But, the VIX and the S & P did diverge yesterday.
They both closed lower. The last time they both closed lower, the market rallied for the next four days.
The VIX did cross into a downtrend on its 60 minute chart. The midband is 50 and should be resistance.
With the VIX crossing into a downtrend, this should help to confirm more upmovement in the S & P.
Objective for the VIX should be to 40.62.
S & P 500:
Minor level: 3,007.85
Major level: 2,968.80
Minor level: 2,929.75
Minor level: 2,851.65
Major level: 2,812.50
Minor level: 2,773.45
Minor level: 2,695.35 **
Major level: 2,656.30 <
Minor level: 2,617.25
Minor level: 2,539.06
Major level: 2,500.00
Minor level: 2,460.95
Minor level: 2,382.85
Major level: 2,304.75
Minor level: 2,226.65
The S & P closed at 2,761.63. At this point, the objective should be to 2,812.50.
And as I said, technical support should be at 2,735. The S & P is close to crossing into an uptrend on the 60 minute chart. A bullish cross will also confirm further upmovement
QQQ:
Major level: 206.25
Minor level: 204.69
Minor level: 201.56 **
Major level: 200.00 <
Minor level: 198.44
Minor level: 195.31
Major level: 193.75
Minor level: 192.19
Minor level: 189.06
Major level: 187.50
The QQQ closed at 203.03. The midband on the daily chart is 195.56 and should now be support.
Support should now be around 201.56. A close today above 201.56 and the QQQ should test 206.25.
Technical support is also around 201.
IWM:
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
Minor level: 160.94
Minor level: 157.81
Major level: 156.25
Minor level: 154.69
Minor level: 151.56 **
Major level: 150.00 <
Minor level: 148.44 **
Minor level: 145.31
Major level: 143.75
The IWM closed at 120.37. The IWM closed above the lower band on the daily chart for the third day, which is now 113.86.
The lower band should now act as support.
125 is a resistance level and if the IWM can clear it, then it should head higher.
TLT:
Minor level: 164.85 **
Minor level: 163.28
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: 155.48
Minor level: 153.91
Major level: 153.13
Minor level: 152.35
The TLT closed at 163.88. The TLT closed under the upper band on the daily chart for the third time in about a week and one half. The upper band is now 167.48.
167.48 should be resistance at this point.
Look for a move to 162.50.
Resistance should be around 166. And support at 160.
GLD:
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
Minor level: 150.78
Major level: 150.00
The GLD closed at 161.41. The major 159.38 level should offer support.
And a close today above 160.16 and the GLD should test 162.50.
The 166 area should now be resistance. And 160 should be support.
XLE:
Major level: 56.25
Minor level: 55.47
Minor level: 53.90
Major level: 53.12
Minor level: 52.34
Minor level: 50.78
Major level: 50.00
Minor level: 49.22
Minor level: 47.65
Major level: 46.88
Minor level: 46.09 **
Minor level: 44.53
Major level: 43.75
The XLE closed at 33.80. The XLE closed again above the lower band on the daily chart. That level is now 31.32. And it should offer support.
The 32 area should now be technical support. And resistance is at 37.
The 34.75 level is also technical resistance. The XLE needs to clear this level to head higher. And if it can, expect it to head higher.
AAPL:
Major level: 312.50
Minor level: 309.38
Minor level: 303.13
Major level: 300.00
Minor level: 296.88
Minor level: 290.63
Major level: 287.50
Minor level: 284.38
Minor level: 278.13
Major level: 275.00 <
Minor level: 271.88
Minor level: 265.63 **
Major level: 262.50
Apple closed at 273.25. Apple is still in an uptrend on its daily chart.
266 should offer strong support for Apple. 268 should be support.
WATCH LIST:
Bullish Stocks: AMZN, REGN, VRTX, AMGN, DG, LLY, FCN, WMT, AKAM, DOCU, CCOI, CNC, FIZZ, STX, CAG
Bearish Stocks: QID, SQQQ, SPXS, TECSWHR, WCN, DGX, DLTR, CRI, WPC, OMC