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
Total Premium Collected $1.95
ASNA Long at $14.20
Total Premium Collected $0.75
DUST Long $4.50
Total Premium Collected $0.70
SNAP Long at $14.54
Premium Collected - $1.65
BERY Long Sept $50.00 Call at $2.70
BERY Long Sept $55.00 Call at $.40
FEYE Long at $16.69
Total Premium Collected - $0.93
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If you followed the alert from yesterday, you would have closed out the short $16 call on FEYE that expires today.
As I mentioned in the alert, you can never pre determine what a stock will do after reporting. Trust me on this. I have not found a reliable set up that works consistently to provide a directional bias going into earnings.
Quite frankly, the strategy that does work is to sell inflated options a head of earnings. And that is what we did on FEYE.
You always keep the premium. But, one of three scenarios can occur. In two out of three of them you win. And that is if the stock moves higher or stays the same. And when than happens, you can decide to close out the short calls of let them run.
The only scenario that hurts you is if the stock drops. But, the stock would have to drop more than the price of the option to hurt you.
Yesterday, the S & P 500 dropped to a low of 2,796.34 and found support before rallying almost 34 points.
It just happens that we were looking for support around the 2,797.90 level,
So, the low came in about 1.60 points under the support level.
And with both the 30 minute and 60 minute charts in uptrends, the bias was still to the upside.
Support from yesterday's daily price bar is in the 2,813 area. Yesterday's close of 2,827.22 should also be a pressure point today.
In looking at how the weekly price bar is shaping up, we see the high is 2,829.91 and the low is 2,796.34.
The midpoint so far is 2,813. Watch this level if the market pulls back that deep.
Pre open, the S & P 500 is trading about 3 points higher. And at 8:30 EST wew will get the Non Farm Payroll figures.
Continue to monitor the longer term levels for the market.
Here are the Key Levels for the Markets:
$VIX:
Major level: 31.25
Minor level: 29.69
Minor level: 26.56
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
The VIX closed at 12.21. The VIX got as high as 14.35 intra day before dropping to close under 12.50 again.
Minor resistance should be at 12.89. And on the downside the minor 12.11 level is the key at the moment. A break under 12.11 and the VIX should drop to 10.94.
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
The 2,797.90 held as support. This level should still act as support on a pullback.
With the S & P 500 closing above the minor 2,822.30 level, it should act as support.
Look for this swing to continue higher, as long as the S & P holds the 2,822.30 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 179.53. The high for the day was 179.74, which put the QQQ to within 50 cents of the 181.25 objective.
178.13 should be support.
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 166.97. The IWM, similar to the QQQ, is back above a major level.
Now that the IWM cleadred 166.41, it should be support. If that does not hold, strong support should be at 165.63.
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 118.63. Two closes undert 118.36 and the TLT should drop to 117.19.
118.75 should still be resistanc, so if the TLT clears this level, it should head higher.
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
The GLD closed at 114.52. A close today under 114.85 and the GLD should drop to 112.50.
115.63 should now be resistance.
The GLD broke under its lower band, which is 114.91. A bounce should be coming, but stay short until some support comes in.
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 75.63. The low for the day was exactly the 75 level.
75 has been strong support for the XLE. Minor support is at 75.39. If the XLE can clear 76.17, look for a move up to 78.13.
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 85.68. A close today below 85.75 and the FXY should drop to 85.16.
I would expect a retest of 85.55. And for that level to hold.
AAPL:
Major level: 200.00
Minor level: 198.44
Minor level: 195.31
Major level: 193.75 <
Minor level: 192.19 **
Minor level: 189.06
Major level: 187.50
Minor level: 186.72
Minor level: 185.16
Major level: 184.38
Apple continued to advance after their earnings report. It was up $5.89 on the day, to close at $207.39.
Apple is now above its upper band on the daily chart. The upper band is 203.93.
$200 should be support, as well as $203.13.
WATCH LIST:
Bullish Stocks: AMZN, GOOGL, ORLY, SPY, DIA, FLT, COST, AMGN, AET,
CXO, GRUB, EOG, UHS, BDX
Bearish Stocks: TSLA, ITW, WHR, SWKS, NXPI, JACK, LAD, SMG, WDC, SEIC, PZZA, WGO
Be sure to check earnings release dates.