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
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AGNC Long at $13.19
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MFA Long at $4.20
MFA Short April $5 Call @ $0.40
KEY Long at $10.72
KEY Short April 24th - $11 call @ $0.32
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The sell-off continued yesterday as we expected. The S & P 500 closed 86.60 points lower. The follow-through was expected because Monday's price bar closed at only 6% of the range of the bar.
This low close percentage suggested further selling yesterday.
The intra day range was 58.44 points. This was about one half the daily average true range, which now reads 104.94.
But once again, the intra day range was shortened due to the bear gap open of 38.35 points.
It seems as if the S & P has had significant gaps almost daily since this pandemic sell-off began. If you are on the wrong side of the gap, these opens can be rather painful.
The S & P closed at 2,736.56. And the low for the day was 2,727.10
The low for the day held above last week's low, which was 2,721.17. As I mentioned yesterday, I felt this level would be tested. And at this point, the market held above the low.
The S & P 500 also held above the midband on the 60 minute chart. The midband is 2,673 and should be support.
Yesterday did close at only 16% of the range of the daily bar, so a violation of yesterday's low would not be unexpected.
As I write this, the S & P is trading about 35 points higher.
The key for today will be if the S & P can hold above last week's low and the midband.
CMG reported last night and is trading about $50 higher. And NFLX reported and is trading about $9 lower.
SNAP reported and is trading almost 20% higher.
This afternoon, we get earnings from LRCX and XLNX. And Thursday morning we hear from DPZ and FCX.
Here are the Key Levels for the Markets:
$VIX:
Major level: 46.88
Minor level: 46.10
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 closed at 45.41. The VIX closed 1.58 points higher for the day.
The VIX will need to close above 44.53 today to move up to 46.88. But, I am looking for the VIX to break back under this level. And if it does, the market should continue higher.
The VIX did cross into a downtrend on its 60 minute chart. The midband is 52 and should still be resistance.
The 41 area should also provide technical resistance.
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 2,736.66. With a close yesterday under 2,773.45, this would suggest that if the market closed under this level today, it should drop to 2,656.
Watch the 2,773.45 level on the upside. Also, the key on the downside will be last week's low of 2,721.17.
The 60 minute chart remains in an uptrend. And the midband is 2,733 and should be support.
Watch for the VIX to reverse to the downside before going long.
QQQ:
Major level: 218.75
Minor level: 217.19
Minor level: 214.06 **
Major level: 212.50
Minor level: 210.93
Minor level: 207.81
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
The QQQ closed at 204.89. The QQQ closed just above the minor 204.69 level.
Watch for the QQQ to hold the minor 204.69 level. If it can't hold this level, then I would expect the market to drop.
Support is at the midband on the 60 minute chart, which is 195.
There is also support around 200.
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 117.74. The lower band should now act as support, which is 111.
The IWM did cross into an uptrend on its 60 minute chart. And the IWM is right at the midband. The midband is 118.90 and the IWM will need to clear this level to head higher.
Support should be around the 116 area.
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 171.29. The TLT is back above the upper band on its daily chart, which is 169.97.
This tells us the TLT is overbought and that the upper band will be retested after it closed back inside it.
Support should be around 168. And 174 should be resistance.
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 158.61. The GLD closed one cent above the minor 158.60 level.
Watch the 159.38 level on the upside. If the GLD can clear this level, it should head higher. If not, look for a pullback.
The 160 area should now be resistance. And 156 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 32.32. Watch the lower band.
The lower band is 29.43 and should now be support.
The XLE crossed into an uptrend on the 60 minute chart. The 32 area should offer technical support. A break under it and the XLE should head lower.
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 268.37. I would expect strong support at the 262.50 level.
Apple has crossed into an uptrend on the 60 minute chart. And the 264 area should be technical support.
WATCH LIST:
Bullish Stocks: AMZN, GOOGL, TSLA, SHOP, CHTR, NFLX, LMT, HUM, DPZ, ADBE, COST, BDX, NVDA, LRCX, VRTX, RNG, AAPL, BABA, ADSK, WST, COUP, KLAC
Bearish Stocks: GATX, LYV, BDC, LUV, DDS, PRA, CAJ, MLHR, SDS
