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.
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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
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The market had a strong rally yesterday after some information came out that some tariffs would be put on hold.
For the day, the S & P 500 climbed 43.63 points to close at 2,926.32.
The range for the day was 66.26 points. This certainly exceeded the daily average true range which is now 40.39 points. In fact, the range was 164% of the average.
I consider a range greater than 150% of the average as a long range candle.
This implies a few things. The first is that the midpoint, which was 2,910.18 should offer strong support.
The second is that the low should not be violated. If it is, then that is a strong indication that the market should head lower.
The other key support level from yesterday's daily bar is in the 2,903 area.
I had mentioned that the support area from last week's weekly bar is in the 2,870 area. Monday's low came in at 2,873.14, or about 3 points above it, so it should continue to offer strong support.
And yesterday's low came in at 2,877.05, which is about 7 points above.
So, this level has been tested twice and should continue to offer support.
Now that the S & P 500 has had two closes above 2,851.58, the upside objective for the market should be to 2,968.80.
Pre open, the S & P is trading about 40 points lower. This implies an open at around 2,886 or about 9 points above yesterday's low.
If the low is taken out, look for further selling.
The market continues to trade off headlines off the Chinese tariffs.
CSCO reports this afternoon, after the close. And WMT reports tomorrow, before the open. And NVDA reports tomorrow 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 17.52. With a close under 17.97 today, the VIX should drop to 15.63.
20.31 should act as resistance. Watch this level today.
17.19 is a minor support level.
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 close at 2,926.32, the objective should be to 2,968. This suggests that lower levels should act as support.
Support should be at 2,905 and 2,881.
As I mentioned above, watch yesterday's low, which was 2,877.05.
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 188.39. 185.94 should now act as support.
And the major 187.50 level should also act as support.
184.02 is the low of yesterday's daily price bar. Watch to see if this holds today.
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 150.27. 148.44 should act as support, which is just under yesterday's low of 147.67.
147 is the lower band on the 60 minute chart. Watch to see if this can hold on the sell off.
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 142.48. At this point, a close under 142.97 suggests a drop to 140.63.
But, the TLT did clear 143.75, so I do expect another rally after a pullback.
Support should be around 139. And the TLT is still above the upper band on the daily chart, which is 139.89.
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
The GLD closed at 141.78. Watch to see if the GLD can clear 143.75.
Like the TLT, the GLD continues to trade above the upper band on the daily chart. The upper band is 139.52.
140.63 is minor 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 58.94. 58.59 is a minor support level. Two closes under this level and the XLE should 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 208.07. Apple had a strong rally, closing 8.49 higher on the day.
Apple came within 7 cents of the 212.50 level.
206 should offer minor support and 200 as well.
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
Be sure to check earnings release dates.
