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
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There are two positions that expire this afternoon and both were short term debit spreads. With the recent market pullback, both positions are underwater. This, again, is why we use strict money management on these short term positions.
Yesterday, the S & P 500 closed 7 points higher. It closed the day out at 2,847.60. And with an open at 2,846.20, the daily bar formed an almost perfect doji bar.
And for the day, the daily bar closed at 71% of the range of the daily bar. This does imply that yesterday's high of 2,856.67 should be violated before the low of 2,825.51.
The key price levels for today will be yesterday's close of 2,847.60 and the midpoint, which is 2,841.
Pre open the S & P is trading about 24 points higher. This suggests an open at around 2,864 or above yesterday's high. Watch to see if yesterday's high holds as support.
As it is shaping up, the weekly price bar is still bearish. The midpoint through yesterday is 2,884.41. Today's projected open would put the S & P within 20 points of the midpoint.
I am biased for a test of this level, so watch how the market reacts at this level.
The question at this point is simply this. Is this the end of the pullback?
As you know, one of the criteria I use to determine if a bottom is in is to look at selling climaxes.
At this point, we have had three climaxes in this sell-off.
The first one was on August 5th when the down to up volume was 11.92. And the second was on August 9th when the reading was 9.13.
And finally, the third one was Wednesday. I had a reading initially of 9.72. The print has now been changed to a reading of 19.73.
This is significant because it is the largest selling climax I have seen since the 14.31 reading on December 4, 2018. The market did not turn that day. It took about 3 weeks for the bottom to come.
But during the sell-off last year, there was only 1 selling climax. During this sell-off, there have been three.
And with just a high reading, it does suggest that this sell-off may be over.
NVDA did report and is trading about $9.50 higher.
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 yesterday at 21.18. At this point, if the VIX closes under 21.10 for two days, it should drop to 18.75.
20.31 should offer support and 21.88 is resistance.
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
2,832 is a support level. And watch the 2,856 level today. And the 2,855 level. These levels should be support if they are violated.
And 2,880 should be resistance on the upside.
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 182.55. The QQQ did test 181.25 as expected. The low for the day was 181.16.
181.25 should now be support. The key in the short term is 182.81. If it can clear this level, it should head higher.
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 145.49. Biased for a drop to 143.75.
143.75 should be a strong support level. But, with the IWM dropping under the lower band on the 60 minute chart, it should have another downleg.
TLT:
Major level: 150.00
Minor level: 148.44
Minor level: 145.31 **
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
The TLT closed at 147.31. This biased for a move up to 150.
145.31 should offer support. 146.36 is also another level to watch. If the TLT breaks under this level, it should pullback.
Continues to trade above the upper band on the daily chart.
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 143.70. Watch to see if the GLD can clear 143.75. And yesterday's high cleared the 143.75 level.
The next level on the upside is 150.
142.19 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 56.28. The XLE closed 3 cents above the major 56.25 level.
If 56.25 can hold, the downtrend could be over. Watch to see if this can hold.
56.64 is minor resistance. And 55.47 is minor 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 201.74. The 200 level should still be support and yesterday's low fell just under it.
Apple should open higher this morning. 203.13 should be support.
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.
