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 $1.06
ET Long at $11.78
Premium Collected $0.35
ET Long at $7.50
Premium Collected $0.60
MFA Long at $4.20
Premium Collected $0.95
PRA Long at $16.45
PRA Short Aug 21st - $17.50 call @ $0.40
CERN Long Sept 19th - $72.50 Call @ $1.75
CERN Short Sept 19th - $77.50 Call @ $0.40
HPQ Long at $18.76
HPQ Short Aug 28th - $19.00 call @ $0.63
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The S & P 500 continued to tick higher yesterday. The day closed out 12.34 points higher.
The market closed at 3,443.62.
And the day closed out at 97% of the range of the daily bar, which suggests the high should be violated before the low.
The only negative was that once again, the daily range contracted. The intra day range yesterday was 18.37 points. This was 54% of the daily average true range, which was also the contraction percentage from Monday.
This now makes yesterday the third consecutive range contraction.
We know that this will lead to an expansion. The only question is when.
The support area from yesterday's daily bar is in the 3,435 to 3,440 area.
But, the key yesterday is that once again, the S & P 500 hit the target we were looking for.
The target we have been looking for has been the major 3,437.40 level.
And yesterday's high took it out by 6.81 points. And the S & P managed to close above it by 6.22 points.
I am sure if you have been reading this update for a period of time, you realize that this is just one more objective that we have been calling for that has been hit.
In other words, as an upside objective is projected, the odds favor that target being hit.
The question now is what should happen?
Well, I think there a few scenarios that can unfold from here.
The first is that the S & P runs to the next minor level, which is 3,476.45 and the market takes a breather.
The second scenario is a move up to the 3,468 area and profit-taking sets in there.
The final scenario is that the S & P makes a run to upper band on the daily chart, which is 3,647.
I do think that ultimately the objective is to the upper band. The question is will we see a pullback before that?
Regardless of which scenario ultimately unfolds, the market is in an uptrend and I would not expect a major bear market to ensue. I would expect another move higher after a pullback or profit-taking sets in.
The support area from last week's weekly price bar is in the 3,389 area. If this level does not hold, there is also a support area around 3,377.
CRM reported last night and is trading about $31 higher pre open. And INTU reported and is up about $22.
Wednesday, after the close, we get earnings from SPLK and NTAP. Thursday morning we get earnings from TIF, DG, and DLTR.
And Thursday, after the close, we get earnings from ULTA, VMW, and WDAY.
Here are the Key Levels for the Markets:
$VIX:
Minor level: 32.03
Major level: 31.25
Minor level: 30.47
Minor level: 28.91
Major level: 28.13
Minor level: 27.35
Minor level: 25.78
Major level: 25.00 Midband
Minor level: 24.22
Minor level: 22.66 **
Major level: 21.88 < HIT
Minor level: 21.10 **
Minor level: 19.53
Major level: 18.75
The VIX closed at 22.03. The VIX closed .34 points lower for the day.
The managed to close just above the 21.88 level Watch to see if the VIX breaks under this level. If it does, I would expect it to head lower.
Also, watch the 22.66 resistance level.
The next minor level on the downside is 21.10. 22.50 is technical resistance.
S & P 500:
Major level: 3,593.60
Minor level: 3,554.55
Minor level: 3,476.45 **
Major level: 3,437.40 < TARGET HIT!!!
Minor level: 3,398.35 **
Minor level: 3,320.25
Major level: 3,281.20
Minor level: 3,242.15
Minor level: 3,164.00
Major level: 3,125.00
Minor level: 3,085.95
Minor level: 3,007.85
Major level: 2,968.80
The S & P closed at 3,443.62. Target hit and the S & P closed above the target.
This suggests that the 3,398 level should be support.
Technical support is around 3,420.
QQQ:
Major level: 287.50
Minor level: 285.94
Minor level: 282.81 **
Major level: 281.25 HIT
Minor level: 279.69
Minor level: 276.56
Major level: 275.00
Minor level: 273.44
Minor level: 270.31
Major level: 268.75
Minor level: 267.18
The QQQ closed at 285.86. The QQQ closed 2.23 higher on the day.
The objective for the QQQ should be up to 287.50 level.
The upper band is now 287.43, which is right at our objective. The question will be to see if the QQQ can close above the upper band.
Technical support is around 283.
IWM:
Major level: 162.50
Minor level: 160.94
Minor level: 157.81
Major level: 156.25 HIT
Minor level: 154.70 **
Minor level: 151.56
Major level: 150.00
Minor level: 148.44
Minor level: 145.31
Major level: 143.75
Minor level: 142.19
Minor level: 139.06
Major level: 137.50
Minor level: 135.94
The IWM closed at 156.40. The IWM managed to close above the 156.25 objective.
Look for a run to the upper band on the 60 minute chart, which is 165.
Technical support is around 155. Watch to see if the IWM can close above 157.81.
TLT:
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
Minor level: 161.72
Minor level: 160.16
The TLT closed at 164.66, closing 1.27 lower. This now sets up a scenario where if the TLT can close under 164.85 today, it should drop to 162.50.
Technical resistance is now around 165. Biased for further down movement.
GLD:
Major level: 190.63
Minor level: 189.85
Minor level: 188.28
Major level: 187.50
Minor level: 186.72
Minor level: 185.16
Major level: 184.38
Minor level: 183.60
Minor level: 182.03
Major level: 181.25 HIT
Minor level: 180.47 **
Minor level: 178.91
Major level: 175.00
The GLD closed at 181.22 The GLD closed .22 higher in the day and just under the major 181.25 level.
To move lower, the GLD needs two closes under 180.47. So, watch to see if the GLD can close under this level.
The upper band is 189.82 and should now be resistance.
To move higher, the GLD will need to clear 182.03.
179 is a technical support level. Watch to see if the GLD can hold this level.
XLE:
Minor level: 44.53
Major level: 43.75
Minor level: 42.97
Minor level: 41.41
Major level: 40.63
Minor level: 39.83
Minor level: 38.28
Major level: 37.50
Minor level: 36.72 **
Minor level: 35.15
Major level: 34.37
Minor level: 33.59
Minor level: 32.03
Major level: 31.25
The XLE closed at 36.50. The XLE is back under the minor 36.72 level.
Watch to see if the XLE can clear 37.50. If it can, it should head higher. If not, it should head lower.
Technical resistance is at 37. And technical support should be around 35 as well.
Biased for a move higher.
AAPL:
Major level: 412.50
Minor level: 409.38
Minor level: 403.13
Major level: 400.00
Minor level: 396.88
Minor level: 390.63
Major level: 387.50
Minor level: 384.38
Minor level: 378.13
Major level: 375.00
Minor level: 371.88
Minor level: 365.63
Apple closed at 499.30. Apple closed 4.13 lower.
Apple is still well above the upper band, which is 465.46. This should be support until a close under it.
By clearing the upper band, it should now be support.
The 4 for 1 split is effective on August 31st. The general pattern after a split is for the stock to drift lower and then find support. Wait until after the split to enter long.
WATCH LIST:
Bullish Stocks: AMZN, TSLA, GOOGL, NVDA, AAPL. NTES, DPZ, LULU, COST, W, RNG, FB, PANW, BABA, CVNA, DE, FDN, FDX, WING, JNJ, ETSY, CHKP
Bearish Stocks: BDX, FLT, MLM, CB, CDW, GWRE, POST, BAX, RL, OMC
