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
XLNX Long September 20th - $110 call for $4.80
XLNX Short September 20th - $115 call for $2.70
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Friday, I suggested you close the debit spread on FDX. I did have an error on the alert. I had reported that the net credit was $70 per spread. The actual credit was $1.30 per spread. The profit was $70 per spread or $700 if you put on the 10 lot.
Sorry for the confusion.
Friday, the S & P opened with a bearish gap of 11.88 points and proceeded to rally to fill the gap.
Nothing unusual at that point.
Then the Trump tweet storm began and the selling started.
From 10:30 until the close, the S & P 500 dropped 92 points. And it closed out the day at 13% of the range, which tells us that there is a bias for Friday's low to be violated.
This was a massive daily range which was over twice the daily average true range, which is 43.97 points.
This qualifies the daily bar as a long range candle, which suggests that the midpoint 2,880.99 should be strong resistance.
A couple of other comments for Friday is that I said that resistance for Friday should be in the 2,927 area. And as it turned out, the high for Friday was 2,927.01.
The other thing I mentioned on Friday was that through Thursday, the market had actually contracted.
I said that for the move to the weekly average, it would have to move above the high or below the low about 36 points.
As it turned out, the market dropped 69 points below the weekly low from Thursday.
So, it turned out that the weekly range actually exceeded the weekly average true range.
The weekly range ended up at 104.11 and the average is 79.95 points.
Resistance from the weekly price bar is in the 2,880 to 2,887 area.
Pre open, the S & P is trading about 21 points higher. We should expect a bounce from the oversold condition from Friday. The question will be how high can it bounce.
Here are the Key Levels for the Markets:
$VIX:
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
Minor level: 14.85
Minor level: 13.28
Major level: 12.50
With the massive sell-off, the VIX naturally spiked higher. It closed out Friday at 19.87. It jumped 19.12%.
And with a close above the minor 19.53 level, this suggests that if the VIX closes above 19.53 today, it should move up toe 21.88.
Watch this level today. If the VIX breaks under it, it should then become resistance.
On the downside, support shoudl be at 17.19 and 18.75.
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 2,847.11, the key short term level will be the minor 2,851.58.
And if the S & P closes under 2,929.73 today, it should test the major 2,812.50 level.
If the market cannot hold the major 2,812.50 level, I would expect a drop to 2,656 and strong support at that level.
2,832 should be minor 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 182.07. This market dropped 3.16% on this sell-off.
At this point, if the QQQ closes under 185.94 today, it should drop to 181.25.
Watch the minor 182.81 level today.
184.38 is a key level to monitor. If the QQQ closes under 184.38 today, it could drop all the way down to 175.
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 also had a drop of over 3%. It closed out the day at 145.43.
A close under 148.44 and the IWM should test 143.75.
The IWM closed at 150.03, closing just above the major 150 level. At this point, support should now be at 148.44. Watch this level on the downside. A break under it and the IWM should head lower.
143.75 is a key level on the downside. Two closes under this level and the IWM could drop to the 125 to 131 area.
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 145.96. The key level for today is the 145.31 level. If the TLT can close above it today, it should move up to 150.
143.75 should be support.
GLD:
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
Minor level: 136.72
Minor level: 135.16
The GLD closed at 144.17. The next level on the upside is 145.31. Two closes above that level and the GLD should test 150.
Like the TLT, the GLD is back above the upper band.
137.50 should be strong support. And 142.19 should offer minor support. 146.88 could offer some resistance on the upside.
XLE:
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
Minor level: 55.86
Minor level: 55.08
Major level: 54.69
The XLE closed at 55.96. The XLE tested and broke under the major 56.25 level.
Two closes under 55.86 and the XLE should drop to 54.69.
The XLE is now seriously oversold. Watch this week to see if it gets a bid.
AAPL:
Major level: 225.00
Minor level: 221.88
Minor level: 215.63
Major level: 212.50 Hit
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
Apple closed at 202.64. Apple dropped almost $10 on Friday.
200 should be strong support for Apple. Quite frankly, I would like to see a bit more of a pullback because it would be an opportunity to go long.
WATCH LIST:
Bullish Stocks: SHOP, LMT, AMT, NEE, HSY, CCI, KLAC, MDT, WING, SHAK, EA, WEC, MRK, INXN
Bearish Stocks: NFLX, REGN, DOZ, TSLA, CLX, MMM, JAZZ, JNJ, FFIV, PSX, PKI, ALC, SQ
Be sure to check earnings release dates.
