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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APA Long Oct $47.50 Call at $3.45
APA Short Oct $52.50 Call at $1.10
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As the market continues to tempt you to put on short positions, I continue to say that your best chance for profit is on the long side. And yesterday was no exception.
Just as it looked like the market would get a meaningful sell off, it stops and turns and heads right back up.
But I have been saying now for about two weeks. And reiterated that on yesterday's webinar.
The question yesterday was where should support for the market be?
We have the 2,472 area based on last week's weekly price bar. And a minor resistance level at 2,468.80. As it turned out, the S & P dropped to a low of 2,466.48 before reversing and heading up to close at 2,477.57.
The high for the day was once again within 20 points of our objective of 2,500.
But this is all yesterday's news. What about today?
The average true range continues to drop and now reads 12.81 points. When the market bottomed back in the beginning of July, it read almost 17 points.
This shows you how dull the market has become.
The other anomaly yesterday was that both the S & P 500 and the VIX closed to the upside. This is a divergence. The last time this happened was on July 18th and the market moved up the next day.
Pre open the market is relatively flat, but I am still biased to the longside.
TSLA reported and should open about $21 to the upside.
The FXY did in fact close lower after finding resistance at the 87.50 level.
Continue to follow the resistance levels.
Here are the Key Levels for the Markets:
$VIX:
Minor level: 16.41
Major level: 15.63
Minor level: 14.84
Minor level: 13.28
Major level: 12.50
Minor level: 11.72
Minor level: 10.16 **
Major level: 9.38 <
Minor level: 8.60 **
Minor level: 7.03
Major level: 6.25
The VIX closed at 10.27. Resistance should be at 10.55 and 10.94. If it reverses off one of these levels and heads down, I would expect the market to continue up.
9.77 should be minor support.
$SPX:
Major level: 2,500.00
Minor level: 2,484.38
Minor level: 2,453.12 <
Major level: 2,437.50 **
Minor level: 2,421.88
Minor level: 2,390.62
Major level: 2,375.00
Minor level: 2,359.38
Minor level: 2,328.12
Major level: 2,312.50
The S & P 500 closed at 2,477.57. Minor support should be at 2,472.70 and 2,476.60.
Watch the 2,480.50 level. The S & P 500 needs to clear this level to head higher.
Buying against support is still the best strategy.
QQQ:
Major level: 150.00
Minor level: 148.44
Minor level: 145.31 ***
Major level: 143.75 <
Minor level: 142.18
Minor level: 139.06
Major level: 137.50
Minor level: 135.94
Minor level: 132.81
The QQQ closed above 143.75, at 143.95 yesterday. 143.55 should be minor support.
And 144.92 could offer resistance.
IWM:
Major level: 146.88
Minor level: 146.09
Minor level: 144.53
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 IWM closed down 1.55, at 140.23. Minor support should be at 139.06.
138.28 is the price level on the downside that I would expect the IWM to fall under. If it does, it should head lower.
TLT:
Major level: 126.56
Minor level: 126.17
Minor level: 125.39
Major level: 125.00 <<
Minor level: 124.61 **
Minor level: 123.83
Major level: 123.44
Minor level: 123.03
The TLT did hit our objective of 125. The high for the day was 125.17.
125 is a key level at the moment. Best practice would be to see is the TLT can clear this level or fail. A straddle or strangle here would be the best trade set up now.
You would be positioned for either event.
123.83 should be support.
GLD:
Major level: 125.00
Minor level: 124.22
Minor level: 122.66
Major level: 121.88 <<
Minor level: 120.32
Minor level: 119.53
Major level: 118.75
Minor level: 117.97
121.88 should still be the objective. At this point, to move lower, the GLD needs two closes under 120.32.
Minor support is at 120.12. And minor resistance is at 120.70.
XLE:
Minor level: 69.53
Major level: 68.75 <
Minor level: 67.97
Minor level: 66.41 **
Major level: 65.63 <<
Minor level: 64.85
Minor level: 63.28
Major level: 62.50
Minor level: 61.72
The XLE closed under 66.41 yesterday. If it cannot clear this level, I would expect a retest of 65.63.
66.60 is minor resistance.
FXY:
Minor level: 87.89
Major level: 87.50
Minor level: 87.11
Minor level: 86.33 **
Major level: 85.94 <
Minor level: 85.55
Minor level: 84.77
Major level: 84.38
Minor level: 83.60
Minor level: 83.20
Major level: 82.81
The FXY closed under 87.11. A close today under 87.11 implies a move down to 85.94.
86.52 is minor support. 87.11 is minor resistance.
AAPL:
Major levels for Apple are 153.13, 150, 146.88 143.75, and 140.63.
Apple gapped up off earnings and closed at 157.14. It was up $7.09 on the day.
153.13 should now be support. And the upside objective is to 162.
WATCH LIST:
Bullish Stocks: AGN, BA, BIDU, ALGN, FB, RTN, EXPE, BABA, MCD, LEA, ALXN, HON, ADP, CAT, DIS, IAC, SINA, CRM, ELS
Bearish Stocks: IBM, PANW, FFIV, BWLD, JACK, DXCM, QCOM, MD, SON, SIMO
Be sure to check earnings release dates.