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.
Current Positions
GOGO? Long at $19.93
Premium collected - $1.25
NCR Long Jan 15 $27 Call
NCR Short Jan 15 $32 Call
Net Debit - $1.70
VIPS Long at $18.88
Short August 28th - $19 Call @ $.75
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Just as it appeared that the selling climax from Monday would be enough to stem this recent market sell off, the market reversed at 3:00 and ended up closing down for the day.
This was a swing of 62 points in an hour.
This morning, once again, it appears the markets are poised for a bullish open.
As a recap, there have now been two selling climaxes in this downswing.
Usually one is enough to turn the markets.? And the second climax had the highest down to up volume I can ever recall.
After the late day reversal yesterday, the S & P 500 ended up closing under it's extreme Bollinger Band on the daily chart.
The lower band is 1,904.55. With a close yesterday at 1,867.61, it is 37 points under that level.
This is certainly very bearish and tells me that after a rally, the odds are very high that the lower bands will get retested.
Before a rally can begin though, the S & P 500 has to reclaim the lower bands.?
By the way, the DOW is also trading under it's lower band on the daily chart.? The only market that isn't is the NASD.
This is certainly a concern for me.
Here are the key levels for the markets.
Stocks...
?
VIX:?
Major level - 50.00
Major level - 43.75
Major level - 37.50
Major level - 31.25
Major level - 25.00
Major level - 18.75
The VIX never reached 43.57 yesterday.? Look for 37.50 to act as resistance.? If the VIX can get above 37.50, look for more selling.
Just as the S & P is trading under it's extreme lower band, the VIX is trading above it.? The top band is 24.33, so the VIX is about 12 points above the top band.
S & P 500 Cash Index:?
Major level - 1,968.80
Major level - 1,937.50
Major level - 1,906.30
Minor level - 1,882.83
Major level - 1,875.00
Minor level - 1,851.62
Major level - 1,843.80
Minor level - 1,867.18
The S & P is still well below the lower band on the 60 minute chart, in addition to being under the lower band on the daily.
The lower band on the 60 minute is 1,960 and with a close yesterday at 1,867.61, it is about 100 points under it.
There maybe resistance at these levels.? A close above them would be bullish.
Nasd 100 (QQQ):?
Major level - 106.25
Major level - 103.13
Major level - 100
Minor level - 99.21
Major level - 96.88
Major level - 93.75
Major level - 90.63
Major level - 87.50
The QQQ continues to be the strongest of the weakest markets.
Though the QQQ is not under the lower band on the daily, it is on the 60 minute timeframe.? 101.93 is the lower band.
A close above it would be bullish, which would also coincide with the major 100 level.
A close today under 99.21 and the QQQ should drop to
96.88.
TLT:?
Major level - 131.25
Major level - 128.13
Minor level - 125.78
Major level - 125
Minor level - 124.22 *
Minor level - 122.66?
Major level - 121.88
Major level - 118.75
The TLT would need two closes under 124.22 to drop to 121.88.? Yesterday the TLT closed at 124.33, or 11 cents above that level.
It would still need two closes under 124.22 to qualify.
Short term timeframes remain in uptrends.
GLD:
Major level - 115.63
Major level - 112.50
Minor level - 110.16 *
Major level - 109.38
Minor level - 108.60 *
Minor level - 107.03
Major level - 106.25
Minor level - 105.46
Minor level - 103.91
Major level - 103.13
The GLD would need two closes under 108.60 to move down to 106.25.
Lower levels should act as support.
XLE:
?
Major level - 65.63
Minor level - 64.85
Major level - 62.50
Minor level - 61.72
Major level - 59.38
Minor level - 58.60
Major level - 56.25
The XLE closed under the 59.38 level yesterday, at 59.22.? It would need two closes under 58.60 to move down to 56.25.
Apple:
Major levels for Apple are 112.50, 106.25, 100, 93.75 and 87.50.
100 should be a major support level for Apple.?
Apple bounced yesterday and closed at 103.74.? A close today under 104.68 and Apple should retest 100.
Apple managed to close above it's extreme Bollinger Band on the 60 minute chart, which is 103.50.? This level should act as support now.
Watch list:
Bullish Stocks:? PANW, ULTA, MNST, CELG, COST, MA, EA
Bearish Stocks: LNKD, FDX, BIDU, IBM, MMM, CMI, RL, DDS, UNP,? ASML, WYNN, DECK, XLE, FOSL,QCOM, SCTY
Be sure to check earnings release dates.