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
RRC Long at $11.85
Total Premium Collected $0.70
RRC Long at $9.20
RIG Long at $8.81
Premium Collected - $1.45
FEYE Long at $17.18
Total Premium Collected $1.06
ET Long at $11.78
Premium Collected $0.35
DBX Long at $19.70
Premium Collected $0.75
Short May 1st - $20.50 Call @ $0.50
ET Long at $7.50
Premium Collected $0.60
AGNC Long at $13.19
Premium Collected $1.45
MFA Long at $4.20
Premium Collected $0.40
CB Long June $105 Call @ $6.50
CB Short June $110 Call @ $4.40
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Yesterday, I suggested you book the profit on the KEY trade. Along with the premium collected, the gain worked out to 16% for 10 days.
After gapping 31.48 points higher at the open, the S & P 500 moved up to the high of the day, which was 2,921.15 and proceeded to sell off all day.
The high for the day was made right at the open.
The pullback yesterday was not terribly surprising. I say this for two reasons. The first is that the high for the day literally stopped at the upper band on the 10 minute chart. I will show this chart in today's webinar.
And the second reason is that the S & P is approaching the 61.8% retracement level of the down move. As I have mentioned before, the 61.8% level is 2,934.
Yesterday's high went to within 13 points of the 61.8% level. You might think this is not that relevant because it is off 13 points, but remember that the down move was 1,201.66, so a difference of 13 points is not that material.
This is why I call these support or resistance levels areas. They are not static price levels. They give us areas to look for possible price reactions. Just like I expect price reactions at the lower or upper extreme bands, which, of course, happened yesterday on the S & P on its 10 minute chart.
The question now is will the 61.8% level produce a larger price reaction?
Pre open, the S & P is trading about 18 points higher as I write this.
This would project to an open around 2,881. So, if the market continues higher, watch the 2,887 to 2,891 area, as this is the resistance area from yesterday's daily price bar.
If the market should clear this level, it would make a run to yesterday's high of 2,921.15.
Should the market clear yesterday's high, then the next level to watch would be the 61.8% level of 2,934.49.
If the S & P clears the 61.8% level, I would expect a run to the midband, which is 2,983.
This level is another key level for this market. And how the market reacts at that level should be rather important.
GOOGL reported last night and is trading about $94 higher. AKAM reported and is trading about $4 lower.
This afternoon, we get earnings from FB, MSFT, TSLA, and MCD.
And Thursday, we hear from AMZN and AAPL.
Here are the Key Levels for the Markets:
$VIX:
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
Major level: 31.25
Minor level: 30.47
The VIX closed at 33.57. The VIX closed .28 points higher for the day.
This was the second close under 33.60, so at this point, I would expect a test of 31.25.
The 34.16 should be a resistance level. And technical support is around 29.
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 2,863.39. The target should be to the major 2,968.80 level. This level is about 12 points below the midband of 2,983.
The 2,851 level should still be support. And technical support is right around the same level.
Resistance is around 2,906.
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
The QQQ closed at 211.50. The QQQ will still need two closes above 214.06 to move up to 218.75.
At this point, 210.93 should be support. The QQQ is right at a key technical level, which is 211.80.
Assuming a move higher at the open, watch for support around 211.80.
The 214 area should be resistance.
IWM:
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
Minor level: 142.19
Minor level: 139.06
Major level: 137.50
Minor level: 135.94
Minor level: 132.81
Major level: 131.25
Minor level: 129.69
Minor level: 126.56
The IWM closed at 129.11. At this point, watch the minor 126.56 level. If the IWM can hold this level, look for a move to 131.25. This was from yesterday, and the IWM hit a high of 131.46.
Support should be around the 128.00 area. And technical resistance is at 133.
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 169.59. The TLT closed 1.93 points higher. The TLT is just under the upper band on the daily chart. The upper band is 171.97.
Minor resistance is at 170. The TLT will need to clear this level to head higher. And if it does, it would then be support.
Support should be around 167.
GLD:
Major level: 165.63
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: 155.47
Minor level: 153.91
Major level: 153.13
The GLD closed at 160.84. At this point, the GLD will need to clear 161.72 to move higher.
162.50 should be resistance. And technical resistance is at 160.77.
156 should be support.
XLE:
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
Minor level: 42.97
Minor level: 41.41
Major level: 40.63
The XLE closed at 36.18. Watch for support at 35.16. And if this level holds, the XLE should move up to 37.50.
Technical support should be around 34. And resistance at the 37 level.
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 278.58. The 275 level should be support. Apple should test the 287.50 level.
Apple does report earnings after the close tomorrow.
Apple has crossed into an uptrend on the 60 minute chart. And the 272 area should be technical support.
Minor resistance is around 282.
WATCH LIST:
Bullish Stocks: GOOGL, SHOP, REGN, DPZ, DXCM, NOW, BDX, WST, ADSK, KLAC, LLY, ZM, RH, SMG, DOCU, BMRN, SWKS, ETN, PZZA, CRUS, AMA, AZN
Bearish Stocks: CB, AJG, NWE, WWD, BLKB, SCI, LUV, SHOO, CAL
