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.
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
Total Premium Collected - $1.65
RRC Long at $11.85
Total Premium Collected $0.70
RIG Long at $8.81
Premium Collected - $1.13
RIG Short April 18th - $9 call @ $0.32
FEYE Long at $17.18
Total Premium Collected $0.80
CLW Long May - $20.00 call for $2.00
CLW Short May - $22.50 call for $1.00
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We had three different deals that expired on Friday. The short $13.50 call on FCX should have been assigned. The result was a return of about 10% for about a month.
The short $17.50 call on FEYE expired Friday as well. And finally, the debit spread on FB expired on Friday.
For today, you should have a few positions that expire. The first is the short $17.50 call on FEYE. FEYE closed Friday below the strike, so the calls should expire worthless today.
At this point, the only open short call position for this Friday are the short $9 calls on RIG. The actual expiration date will be Thursday, due to the market being closed on Friday for Good Friday.
Onto the markets.
The S & P 500 had a strong gap open on Friday. It opened 12.54 points above Friday's close and 7.44 points above Friday's high.
The low for the day came in at 2,898.37 and the high was 2,910.54. And the market settled at 2,907.41.
This price action put the market within 3 points of the next upside level, which is 2,910.15.
How the market reacts at this level should tell us the next minor move for the market. This is because if the S & P 500 has two closes above 2,910.15, it should move up to 2,968.80.
Incredible that we are talking about the major 2,968 level again when you consider that the S & P 500 was at 2,346 in December, just 4 months ago.
But, the negative for the market at the moment is that the VIX is back down to all time lows.
The VIX actually settled under our objective of 12.50 on Friday. And it closed under the 12.50 level. It settled at 12.01.
So, this puts us on alert that a pullback could happen.
The sentiment indicators are also putting us on alert. The bullish percent index now reads 79.40%. And the percent of stocks above their 200 day average is 73.55%.
Oversold readings are over 80% for these indicators, but the market can turn just below that figure.
But, we need to stay long until we see signs of a reversal. And Friday closed at 74% of the daily price bar, so the odds tell us the high should be violated before the low.
The support area from Friday's daily bar is around 2,904.
For the week, the S & P 500 closed 14.67 points higher. And it closed at 91.6% of the weekly bar, so we are biased for a violation of the weekly high, which was 2,910.54.
The week did contract. The range was only 37.21 points as compared with the weekly average true range of 77.10. So, the weekly range was less than one half the average.
Support from last week's weekly bar is in the 2,909 to 2,890 area.
Earnings season is just beginning. Goldman Sachs reported this morning and is up 2.26 points pre open.
Tomorrow afternoon, we will hear from NFLX. Wednesday afternoon we will hear from Alcoa.
And Thursday morning, we get earnings from HON and SLB.
Pre open, the market is trading relatively flat.
Here are the Key Levels for the Markets:
$VIX:
Major level: 18.75
Minor level: 17.97
Minor level: 16.41
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
The VIX closed out Friday at 12.01, down 1.01 points for the day. At this point, 12.50 should be resistance.
And minor resistance is at 12.89.
12.11 is a minor level. And if the VIX closes under 12.11 today, it should drop to 10.94.
SPX:
Major level: 2,968.80
Minor level: 2,849.25
Minor level: 2,910.15 **
Major level: 2,890.60 <
Minor level: 2,871.08 **
Minor level: 2,832.03
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
The key at the moment will be to see if the S & P 500 can close two days above 2,910.15. And the S & P 500 did manage to close above the minor 2,905.30 level.
2,890.60 should continue to act as support.
Both the 30 and 60 minute charts continue to be bullish. 2,888 is technical support.
Continue to buy against support.
QQQ:
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
Minor level: 173.44
Minor level: 170.31
Major level: 168.75
Minor level: 167.19
The QQQ closed at 185.83. The upside target is still to 187.50. And the QQQ is within 1.5 points of it.
If the QQQ can clear 185.94, look for it to continue to push higher. 185.16 is minor support.
Like the S & P 500, both short term charts are bullish. Technical support is at 185.
Continue to buy against support.
IWM:
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 < HIT!
Minor level: 154.69 **
Minor level: 151.56
Major level: 150.00
Minor level: 148.44
The IWM closed at 157.68. The IWM is now within reach of the next upside level, which is 157.81. Two closes above 157.81 and the IWM should test 162.50.
The midband is now 156.19 and should offer support.
If the IWM can clear 159.38, it should head higher.
The 30 minute chart is bullish and the 60 minute chart is close to crossing into an uptrend. If it can, it should head higher.
TLT:
Major level: 126.56
Minor level: 126.17
Minor level: 125.39
Major level: 125.00
Minor level: 124.61
Minor level: 123.83
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
The TLT closed at 122.67. The TLT is headed to 121.88.
If this level cannot hold as support, I would expect a drop to 120.31.
Technical support is at 122.35 and the TLT could find support there.
GLD:
Major level: 126.56
Minor level: 126.17
Minor level: 125.39
Major level: 125.00
Minor level: 124.22
Minor level: 122.66 **
Major level: 121.88 <
Minor level: 121.09 **
Minor level: 119.53
Major level: 120.31
Minor level: 119.92
Minor level: 119.14
Major level: 118.75
The GLD closed at 121.83. Two closes under 121.09 would suggest a drop to 120.31 before a move higher.
The 60 minute chart still remains in a downtrend. Technical resistance is at 123.
XLE:
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
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 67.56. Still expect a move up to 68.75. But, the XLE is right at the midband on the daily chart, which is 68.84.
68.40 is Friday's high. I am biased for the XLE to break through the midband.
67.19 is a minor support level. This should still be a support level. If it holds, I would expect the XLE to move higher.
I would expect strong support at the 65.63 level.
Short term charts remain bullish. Buy against support.
FXY:
Major level: 89.84
Minor level: 89.65
Minor level: 89.26
Major level: 89.06
Minor level: 88.87
Minor level: 88.48
Major level: 88.28
Major level: 87.50
Major level: 86.72
Major level: 85.94 <
Minor level: 85.75 **
Minor level: 85.36
Major level: 85.16
Minor level: 84.97
The FXY closed at 85.14. The FXY could not clear 85.94 and sold off.
We were looking for a target of 85.16 and it has been hit. If this level cannot hold as support, look for a drop to 84.38.
AAPL:
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
Apple closed at 198.87. Now that 200 has been hit, I would expect support at 198.44. And if Apple can close above 200, it should head higher.
The next level higher is 201.56. Apple will need to clear this level to move up to 206.
Technical support is around 198 as well. Still buy against support.
WATCH LIST:
Bullish Stocks: CMG, ANET, FLT, ZBRA, SHOP, CP, MA, OLED, ADP, HON, V, ITW, CMI, DIS, ZBH, VRSK, XLNX
Bearish Stocks: NFLX, HUM, CW, MDSO, ABC, TWOU, CVS, WFC, HLF, EAT
Be sure to check earnings release dates.