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 - $0.81
FEYE Long at $17.18
Total Premium Collected $0.80
Short April 12th - $17.50 call @ $0.25
FCX Long at $12.74
Total Premium Collected $0.73
Short April 12th - $13.50 call @ $0.25
CLW Long May - $20.00 call for $2.00
CLW Short May - $22.50 call for $1.00
FB Long April 12th - $172.50 Put for $1.64
FB Short April 12th - $167.50 Put for $0.58
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As we move to close out the first week of April, we see the market continuing to tick higher. The S & P 500 closed out yesterday 5.99 points higher, to close at 2,879.39.
However, for the day, the market formed an inside day with a lower high and a higher low.
And typically, an inside day will form a contraction. And that is what happened. For the day, the range was only 14.14 points. And with a daily average true range of 26.06 points, the range was only 54% of the average.
So, yesterday was the second consecutive day of contractions. What does this mean?
We know it foretells of an expansion. The question is when ... and which direction will the expansion go?
Perhaps, the release of the nonfarm payroll this morning at 8:30 EST will be the catalyst to move the markets, both directionally and expanding the range.
I tend not to rely on the close percentage when a market has a contraction. Instead, you want to monitor the high, close and low.
And for yesterday, those levels are 2,881.28, 2,879.39 and 2,867.14 respectively.
The close should be support until it is violated. And a breakout or breakdown should also be monitored.
Pro open, the S & P 500 is almost 5 points higher but this is well before the release of the NonFarm Payroll.
And this is the type of news event that can move the markets.
In scoping back to look at the weekly price bar, the most notable fact is that through yesterday's close, the range is only 37 points. The weekly average true range is 79.59 points, so at this point, the range is less than 50% of the average.
So, the weekly price bar is also forming a contraction.
And the midpoint so far is 2,866.94. This should be a level to watch today on a retest.
Here are the Key Levels for the Markets:
$VIX:
Minor level: 22.66
Major level: 21.88
Minor level: 21.10
Minor level: 19.53
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
The VIX closed out the day at 13.58. It closed to the downside .16 points. The low for the day was 13.40 which was 90 cents above our objective.
12.50 should still be the objective for the VIX.
As you know, this is a level where the VIX will typically find support. I will continue to monitor the VIX as we trade closer to it. And it is getting me concerned that the VIX cannot break under 13.28. If the VIX cannot drop below this level, we may see a bounce.
SPX:
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 S & P 500 closed the day at 2,879.39. Target is now up to the 2,890.60 level. And the market is inching closer to it. Yesterday came within 9 points of this objective.
2,873.50 is a minor support level. Watch to see if the market can hold this level today. If it can, I would expect up to our objective. If it can't, a drop to 2,861 should be the objective.
Both the 30 and 60 minute charts continue to be bullish. So, bias is still to the upside. Technical support is at 2,850.
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 183.71. The upside target is still to 187.50.
Support should be at 181.25. And minor resistance is at 184.38.
Like the S & P 500, both short term charts are bullish. Technical support is at 182. 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 <
Minor level: 154.69
Minor level: 151.56 **
Major level: 150.00 <
Minor level: 148.44
The IWM closed at 155.92. The IWM continues to inch closer to the target of 156.25.
The IWM is literally sitting right on the midband which is now 156.04. The high yesterday was 156.01. Will it clear the midband?
We know if it can, it should be support, and resistance if it fails.
154.69 is a minor support level. And the 154 area should offer technical support.
TLT:
Major level: 128.13
Minor level: 127.74
Minor level: 126.95
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
The TLT closed at 123.87. I mentioned yesterday, "123.44 is a major support level. If the TLT can hold this level, it should get a bounce." And yesterday's low was exactly 123.44.
And with a close today above 123.83, the TLT should test 125.
If the TLT does break under 123.44, I would expect support at 121.88.
125 should now be 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 122.11. The GLD is now trading around the major 121.88 level.
Look for a move up to 122.66. And the GLD takes out 122.66, I would expect it to continue higher.
The 60 minute chart still remains in a downtrend. And now the 30 minute chart crossed into a downtrend. This now suggests that rallies should be sold.
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 66.44. Still, expect a move up to 68.75.
The XLE continues to trade just above the major 65.63 level. In fact, yesterday's low was 65.61.
I am expecting a test of the midband which is 68.81. Clearing that level is another issue.
I would expect strong support at the 65.63 level and the XLE closed just above it yesterday.
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 85.48. Watch to see if the FXY can clear 85.94. It should be resistance, so if it can get above it, I would expect a bounce.
Still biased for a drop to 85.16. 85.35 is a minor support level.
Technical resistance is still around 86.
AAPL:
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
Minor level: 185.94
Minor level: 182.81
Major level: 181.25
Apple closed at 195.69. With a close yesterday above 195.31, look for a move up to 200.
But, minor resistance is at 196.88. If Apple can clear this level, look for the move up to 200.
That long at 189.06 I mentioned the other day is looking pretty good.
WATCH LIST:
Bullish Stocks: CMG, AVGO, COST, MA, SHOP, AMT, MCD, CLX, HON, V, KMB, DRI, HSY, PYPL, YUM, WING, EPR, WPC, SBUX, CLH, THS, RIO
Bearish Stocks: NOC, LLL, HUM, BIDU, CTXS, ALL, SWKS, SINA, WDC, GOOS, FLIR, Z, YELP
Be sure to check earnings release dates.
