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
AMC Long at $16.16
AMC Short April 18th - $16.50 call @ $0.35
.........................................................................................
Tomorrow will effectively be the expiration for the weekly and April monthly options due to the market closure on Friday. We do have two open positions that expire tomorrow. They are the short $9 call on RIG and the short $16.50 call on AMC. Hold the positions through the close tomorrow, unless I issue an alert.
Now onto the markets.
For the second consecutive day in a row, the markets were relatively flat. For the day, the S & P 500 closed 1.48 points higher. It closed out the day at 2,907.06.
This is one of those times in the market where it is trying to decide what it will do. I call this the moment of truth.
I say this because there are a number of factors to consider.
First, the S & P 500 took out the major 2,890.60 level. And now is struggling to close above the next minor level which is 2,910.15.
Friday, the market hit the 2,910.15 level and Monday's high was just under it. And now yesterday, the market managed to move above it and hit a high of 2,916.06 before dropping about 9 points to close under it.
So, it is now three consecutive days in a row where the S & P 500 could not close above 2,910.15.
This is not giving us a clear signal. A clear signal would be two closes above 2,910.15. This would demonstrate conviction and suggest the market should then move up to 2,968.80.
The second factor is that the S & P 500 has moved two levels in the latest upswing. Back on March 8th, the S & P 500 essentially reversed off the 2,734.40 level. The actual low was 2,722.27 or about 12 points below it, but the market managed to close above 2,734.40 that day.
Since rallying off that level, the market has moved up two levels. I bring this up because in bull markets, an upmove is typically three levels. And three levels would bring the market to 2,968.80.
The third factor is that the VIX is now back to all time lows. This is another warning that the market is possibly ready for some profit-taking.
I am not going to delve too deeply into this because you know the oversold levels for the VIX.
And the fourth factor is this. Both the 30 and 60 minute charts for the S & P 500 remain firmly bullish.
With this set up, you usually do not see a massive selloff without at least a rally and a failure.
I bring this up because it is a combination of all these factors that can help us make intelligent decisions about the market direction.
The resistance level from yesterday's daily bar is in the 2,908 to 2,910 area.
Pre open, the S & P 500 is trading about 7 points higher. This projects to an open around 2,914 or about 2 points below yesterday's high.
Look to see if the S & P 500 can clear yesterday's high of 2,916.06. If it can, it should offer support.
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 yesterday at 12.18, down 13 cents for the day. At this point, 12.50 should be resistance. And 13.28 as well. Yesterday's high came to 12.47 before the VIX dropped to close under 12.50.
12.50 should be resistance until it is violated.
And minor resistance is at 12.89. Watch the 12.11 level today. A break under this and I would expect a 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. The minor 2,902.80 level should offer support.
2,905.85 is a minor level and look for support here is the market does pullback.
Both the 30 and 60 minute charts continue to be bullish. 2,894 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 186.50. The QQQ continues to inch close to the 187.50 objective. It is slowly moving to the target, but I think today it finally hits it.
185.94 should now be minor support.
Like the S & P 500, both short term charts are bullish. Technical support is at 185.40.
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 157.54. Two closes above 157.81 and the IWM should test 162.50.
The midband is now 156.23 and should offer support.
If the IWM can clear 159.38, it should head higher.
Minor support is at 156.64 and 157.42.
The 30 minute chart is bullish. And the 60 minute chart just moved into an uptrend. This does suggest higher prices for the IWM.
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 122.21. The TLT failed to close above 122.27. Look for a drop to 121.88.
121.88 should offer support, but it can't, I would expect support to come in at 120.31.
122.66 should be minor resistance. And 123.40 is technical resistance.
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 120.51. A close today under 121.09 would suggest a drop to 120.31.
121.09 should be resistance now.
The 60 minute chart still remains in a downtrend. And the 30 minute chart as well.
Technical resistance is around 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 67.60. Still expect a move up to 68.75. The XLE is trading right between the midband, which is 68.83 and the 200 ema, which is 66.41.
These are both key support levels. So, watch for a breakout or breakdown.
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. If the XLE can move back above 67.19, look for a push higher. The XLE did manage to hold at 67.19.
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 85.13 for the second day. The FXY is trying to form a base around the 85.16 level. If it can hold this level, I would expect a push higher.
Next minor level to the upside is 85.36. On the downside, 84.96 is a minor support level. If the FXY cannot hold 84.96, I would expect it to head lower.
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 199.25. Now that 200 has been hit, I would expect support at 198.44. And if Apple can close above 200, it should head higher.
198.44 to continue to offer support.
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.