While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to 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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As we close out this week, we had a strong reversal in the markets yesterday. The S & P 500 closed 22.32 points to the upside yesterday. It closed at 2,840.69.
The intra day range was only 19.05 points. But, if we measure the close to high relationship, it is 32.12 points. This was due to the bullish gap at the open.
Gaps become natural price objectives and tend to get filled, so it is something to be aware of.
Yesterday, I said to ... "Watch to see if 2,928.60 holds as support. And on the upside, watch the 2,840 level."
When the market gapped above 2,928.60 at the open and headed higher, this was the indication that the move should continue higher. It happened to break 2,840 and ran to a high of 2,850.49, before selling off the close right around the 2,840 level I mentioned.
2,840 also happens to be the midband on the 10 minute chart and the market closed just above it.
The S & P 500 was also able to close back above the downside level of 2,829.60. Recouping this level was key because now the market would need need two closes under 2,829.60 to move lower.
The short term 30 and 60 minute charts still remain bullish. This is why we were looking for a bounce. The technical levels to watch are the midbands on both charts. The midband for the 30 minute chart is 2,830 and for the 60 minute chart it is 2,801.
The support area from yesterday is in the 2,836 to 2,840 area.
The support area from last week's weekly price bar is in the 2,836 to 2,845 area.
Scaling back to the weekly chart, we see that the S & P 500 has really not made any major headway this week.
The week opened at 2,835.46 and yesterday closed at 2,840.69. So, the rally brought the market back about 5 points above the open.
The midpoint of the weekly bar so far is 2,826. The S & P 500 closed about 14 above it. If the market does pullback, watch this level.
Continue to monitor the longer term levels for the market.
Pre open, the S & P 500 is trading about 4 points lower. Watch the support levels.
Here are the Key Levels for the Markets:
$VIX:
Major level: 25.00
Minor level: 23.44
Minor level: 20.31
Major level: 18.75 <
Minor level: 17.19
Minor level: 14.06 **
Major level: 12.50 <
Minor level: 10.94
Minor level: 7.81
Major level: 6.25
The VIX closed at 13.54. The drop brought the VIX back under 14.06. So, to move higher, the VIX will need two closes above 14.06.
Support should still be at 12.50. And minor resistance is at 14.06.
Watch the 13.28 level today. A break under it and I would expect a test of 12.50. If it holds, the VIX could test 14.06.
SPX:
Major level: 2,890.60 <
Minor level: 2,878.40
Minor level: 2,854.00 **
Major level: 2,841.80 <
Minor level: 2,829.60 **
Minor level: 2,805.20
Major level: 2,793.00
Minor level: 2,780.78
Minor level: 2,756.33
Major level: 2,744.10
Target is up to 2,890.60. Minor support is at 2,839.95. If the S & P can hold 2,839.95, I would expect a move to 2,849.10.
Minor support should be at 2,824.70. And or course, 2,829.60 should be a support level.
QQQ:
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
The QQQ closed at 179.82. Target should still be to 181.25.
Minor support is at 180.08 and 179.69.
Like the S & P 500, both short term charts remain bullish.
IWM:
Major level: 171.88
Minor level: 171.10
Minor level: 169.53
Major level: 168.75 <
Minor level: 167.97
Minor level: 166.41 **
Major level: 165.63
Minor level: 164.85
Minor level: 163.28
Major level: 162.50
The IWM closed at 167.63. 165.63 should be major support. And objective should be to 168.75.
166.80 is minor support. And if the IWM can hold 167.19, I would expect it to head higher.
TLT:
Major level: 123.44 <
Minor level: 121.49
Minor level: 120.70 **
Major level: 120.31
Minor level: 119.92
Minor level: 119.14
Major level: 118.75
Minor level: 118.36
Minor level: 117.58
Major level: 117.19
The TLT closed at 120.83. The TLT should test 123.44.
120.51 should be minor support. 121.48 could offer resistance on the upside.
GLD:
Major level: 118.75
Minor level: 118.36
Minor level: 117.58
Major level: 117.19
Minor level: 116.80
Minor level: 116.02
Major level: 115.63
Minor level: 114.85 **
Minor level: 113.28
Major level: 112.50 <
I mentioned yesterday that the GLD is officially in free fall and it continued lower again.
It closed at 111.10. If the GLD stays under 111.72, I would expect it to drop further to 109.38.
The GLD is still under the lower band on the daily chart. The lower band is 113.39.
The GLD is way oversold, but shorting here does not make sense.
I think ultimately the GLD drops to 100. It will need two closes under 109.38 and that will confirm the drop.
XLE:
Major level: 78.13
Minor level: 77.35
Minor level: 75.78
Major level: 75.00
Minor level: 74.22
Minor level: 72.66
Major level: 71.88 <<
Minor level: 71.10
Minor level: 69.53
Major level: 68.75
The XLE closed at 72.43. The XLE continues to cling to the 71.88 level.
71.88 is a major level for the XLE. Two closes under 71.88 and the XLE should drop to 62.
If the XLE can hold 71.88, I would expect a move back up to 78.
FXY:
Major level: 86.72 <
Minor level: 86.53
Minor level: 86.14 **
Major level: 85.94
Minor level: 85.75
Minor level: 85.36
Major level: 85.16
Minor level: 84.97
Minor level: 84.58
Major level: 84.38
The FXY closed at 86.26. The FXY should test 86.72.
86.14 should offer minor support. And 85.94 should offer strong support.
AAPL:
Major level: 225.00
Minor level: 221.88
Minor level: 215.63
Major level: 212.50 <
Minor level: 209.38
Minor level: 203.13
Major level: 200.00
Apple closed at 213.32. Apple took out the 212.50 objective.
Apple is still above the upper band, which is 209.36.
212.50 should be major support. If Apple can hold this level, look for a nove up to $250
WATCH LIST:
Bullish Stocks: AMZN, GOOGL, CMG, HUM, NVDA, AET, ZBRA, WDAY, FANG, GRUB, SODA, PSX, VLO, CTXS, NTAP
Bearish Stocks: BIDU, NTES, BABA, ALXN, SWKS, CBOE, LAD, SMG, SINA, AABA
Be sure to check earnings release dates.