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 $0.80
CHKP Long August 16th - $110 call for $2.70
CHKP Short August 16th - $115 call for $0.60
DLTR Long August 16th - $102 call for $2.35
DLTR Short August 16th - $107 call for $0.40
XLNX Long September 20th - $110 call for $4.80
XLNX Short September 20th - $115 call for $2.70
.........................................................................................
The marketwide sell off continues. The S & P 500 closed 35.96 points lower. It closed out the day at 2,882.69.
The low for the day was 2,873.14. The weekly support area of 2,870 is still valid and an area to watch today.
And resistance from yesterday's daily bar is in the 2,890 to 2,895 area.
The question now is where will this market slide end?
I will cover the scenarios I see developing at the moment.
First off, the S & P 500 broke under the lower band on both the 30 minute and 60 minute charts.
This happened on the first downwave on August 6th and August 7th.
After the bounce, the market sold off for the retest of the lower bands. As you know, when price takes out an extreme band, there is a very high probability that it will get retested again.
And that is what is happening now. The question is will price hold above the lower bands. If it can, then I would expect the market to move higher.
The lower band on the 30 minute chart is 2,815.87 and the lower band on the 60 minute chart is 2,845.61.
Yesterday's close at 2,882.69 or 37 points above the lower band on the 60 minute chart.
Either the lower band will hold as support or it will break under it again, which suggests more selling pressure to follow.
On the daily chart, there are two key levels of support under the market. The first is the 200 ema, which is 2,842.78.
And the second is the midband, which is 2,808.54.
The final fact I do need to point out is the fact that there had two selling climaxes in this selloff. This usually tells us that the selling should be close to over.
The first selling climax was on August 5th when it read 11.92. And the second was August 9th when it read 9.13.
These readings are the down to up volume. And a selling climax is registered when it is greater than 9 to 1. And the market has now had two climaxes.
One selling climax can turn the market, so two climaxes is even better.
The resistance levels are the other factors to consider and I will review them below.
Yesterday, the S & P closed at 28% of the daily price bar. This suggests that the odds favor the violation of the low before the high.
And with the market trading about 7 points lower before the open, this suggests that the market should open about 2 points above yesterday's low of 2,873.14.
I would expect a move to under yesterday's low and look for support at the lower bands.
Advanced Auto Parts (AAP) reported and is down about $12.
NVDA reports Thursday after the close.
Here are the Key Levels for the Markets:
$VIX:
Major level: 28.13
Minor level: 27.35
Minor level: 25.78
Major level: 25.00
Minor level: 24.22
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
The VIX closed out the week at 21.09. It ended the day up at 3.12.
The high for the day was 21.26 or about 62 cents under the major 21.88 level.
With a violation of 20.13, it should now be support. A move up to 25 is possible.
SPX:
Minor level: 3,164.08
Major level: 3,125.00
Minor level: 3,085.95
Minor level: 3,007.85
Major level: 2,968.80
Minor level: 2,929.73
Minor level: 2,851.58 **
Major level: 2,812.50 <<
Minor level: 2,773.45
Minor level: 2,695.35
Major level: 2,656.30
With a break under 2,905.30, it should now be resistance. On the downside, the key level is 2,880.90.
If the S & P has two closes under the minor 2,880.90 level, it could drop to 2,807.
Watch to see if the 2,851.58 holds as support.
QQQ:
Major level: 196.88
Minor level: 196.10
Minor level: 194.53
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
The QQQ closed at 184.35. At this point, a close under 185.94 and the QQQ should drop to 181.
185.94 should now be resistance. Minor support is at 182.81.
Watch for possible support at 180.
IWM:
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 148.67. The key for the IWM is the minor 148.44 level. If the IWM has two closed under this level, it should drop to 144.
147 is the lower band on the 60 minute chart. Watch to see if this can hold.
TLT:
Major level: 143.75
Minor level: 142.97
Minor level: 141.41
Major level: 140.63 <
Minor level: 139.85
Minor level: 138.28
Major level: 137.50
Minor level: 136.72
Minor level: 135.16
Major level: 134.38
Minor level: 133.60
The TLT closed at 142.97, closing right on the minor level. 143.75 should be the objective. And yesterday's high came to within 32 cents.
I don't expect a serious pullback until it closes back inside the upper band.
143.75 is a key level. If the TLT clears this level, it should head higher.
GLD:
Major level: 143.75
Minor level: 142.97
Minor level: 141.41 **
Major level: 140.63
Minor level: 139.85
Minor level: 138.28
Major level: 137.50
Minor level: 136.72
Minor level: 135.16
Major level: 134.48
Minor level: 133.60
Minor level: 132.03
Just like the TLT, the GLD is seriously overbought. It closed out at 142.63.
Like the TLT, the GLD is above the upper band on the daily chart. And like the TLT, 143.75 is a price level.
141.80 is a minor support level. And 142.19 should also be support.
XLE:
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 <
Minor level: 58.60
Minor level: 57.03
Major level: 56.25
The XLE closed at 58.40, 20 cents under the 58.60 level. This now suggests that if the XLE closes under 58.60 today, the could drop to 56.
60.16 is a minor resistance level on the upside. 57.81 should be support.
AAPL:
Major level: 212.50
Minor level: 209.38
Minor level: 203.13
Major level: 200.00 <
Minor level: 196.88 **
Minor level: 190.63
Major level: 187.50
Minor level: 184.38
Minor level: 178.13
Major level: 175.00
Apple closed at 200.48. Apple continues to hold the major 200 level.
It will now need two closes above 203.13 to move up to 212.50.
200 should still offer support. If that can't hold, look for support at 193.75.
WATCH LIST:
Bullish Stocks: GOOGL, CNG, NOC, SHOP, IAC, MLM, MCD, RTN, VRSK, UHS, CB, ZBH, FIS, ROKU, CBOE, RS, SBUX
Bearish Stocks: ALGN, MMM, NVDA, FFIV, CAT, BIDU, FTV, VLO, GRUB, SQ, WUBA, CNC, NTAP, MO, XEC, CLB
