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
TEVA Long at $9.78
TEVA Short Dec 20th - $10 Call - $0.26
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Yesterday, I suggested a short term covered call on TEVA. The alert suggested you buy the stock and sell the $10 call that expires next week.
The S & P 500 came within 15.21 points of the minor 3,164.08 level before selling off. The high for the day was 3,148.87.
The market ended up closing 9.95 points lower. The day closed out at 3,135.96, which is about 10 points above the major 3,125 level.
The intra day range was only 13.41 points, which was less than the daily average true range of 21.89 points. The daily range was a contraction of 61%.
And it was an inside day, with a lower high and a higher low.
This suggest we should see a range expansion.
And with the daily bar closing at only 4% of the range of the bar, the bias is to the downside.
And pre open, the S & P is trading about 9 points lower. Assuming this trading holds ups to the open, the market should open about 8.50 points under yesterday's low.
It would also put the open right around the major 3,125 level.
Watch this major level today to see if it can offer support. If it can't, I would expect a retest of the 3,085.95 level.
On the upside, yesterday's close of 3,136 should offer resistance. And the 3,142 area as well.
Short term charts remain bullish so I do expect a bounce in the market.
Support from last week's weekly bar should still be in the 3,108 to 3,110 area.
COST reports earnings Thursday after the close. And ADBE reports Thursday after the close as well.
Here are the Key Levels for the Markets:
$VIX:
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
Minor level: 11.72
Minor level: 10.16
Major level: 9.38
The VIX closed out at 15.86 yesterday. The VIX did hit the 12.50 objective, hitting a low of 12.25, before spiking up to take out 15.63.
So, in one day, the VIX travelled from the 12.50 level to the 15.63 level.
A pop in the VIX is not all that unxpected due to the fact that the VIX took out the upper band on the 60 minute chart. This, as you know, suggests that a retest of the upper band again is highly possible.
It breached the upper band on the 60 minute on December 3rd. And yesterday, it closed exactly at the upper band.
The upper band on the 60 minute is 15.86 and that is exactly where the VIX closed yesterday.
With the market trading lower pre open, the VIX should take out the upper band again, which would suggest another rally in the VIX after it puls back.
Friday's low was 13.19 or 69 cents above the major 12.50 level.
Technical support is at 14.60. And watch the 16.41 level in the upside.
SPX:
Minor level: 3,164.08
Major level: 3,125.00 < Hit
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
The S & P closed at 3,135.96. The S & P closed about 10 points above the 3,125 level.
3,134.76 is a minor level. This should now be resistance.
And the minor 3,105 level should offer support. Watch the major 3.125 level today.
Technical support is in the 3,122 area.
QQQ:
Major level: 206.26
Minor level: 205.48
Minor level: 203.91 **
Major level: 203.13 HIT
Minor level: 202.35 **
Minor level: 200.78
Major level: 200.00
Minor level: 199.22
Minor level: 197.77
Major level: 196.88
The QQQ closed at 204.07. Watch the 203.91 level for support. A break under this level and the QQQ should drop to 203. If this level is violated, support should be at the minor 202 level.
203.20 is a minor technical resistance level. Watch for support at this level on a pullback.
IWM:
Major level: 168.75
Minor level: 167.19
Minor level: 164.06
Major level: 162.50 Hit
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 closed at 162.51. The IWM took out the major 162.50 level and is trading right at it.
Watch the minor 164.06 on the upside and 157.81 on the downside.
Minor technical support is now at 161.20.
TLT:
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: 135.84
Minor level: 132.81
Major level: 131.25
The TLT closed at 138.65. Expectation is still for a drop to 137.
139.85 should still be resistance. Technical resistance is around 139. And yesterday's high was 139.11.
If the TLT breaks under 137.50, I would expect it to continue lower.
GLD:
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
Major level: 134.38
The GLD closed at 137.58. Watch the 140.63 level on the upside. The GLD needs to clear it to head higher. And watch to see if the GLD breaks under 137.50. The GLD is now within 8 cents of it.
A break under the major 137.50 level and it should head lower.
Technical resistance is at 138.30.
The key level is 134.38 on the downside. If the GLD has two closes under this level, it could drop to 125.
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 59.65. The XLE closed back above the major 59.38 level.
At this point, the minor 60.16 level is the key level on the upside. Two closes above this level and it should head up to 62.50.
59.38 should be support and technical support is at 59.
The daily chart is getting close to crossing into an uptrend.
AAPL:
Major level: 281.25
Minor level: 277.35
Minor level: 269.54 **
Major level: 265.63 HIT!
Minor level: 261.72
Minor level: 253.91
Major level: 250.00
Minor level: 246.88
Minor level: 240.63
Major level: 237.50
Apple closed at 266.92. Apple closed under the 269.54 level, so it would still need two closes above 269.54 to move up to 281.
Watch the major 265.63 level. If this level cannot hold as support, I would expect a drop to 261.72.
Technical support should now be in the 264 area. Short term trends are bullish.
WATCH LIST:
Bullish Stocks: CMG, SHOP, HUM, MLM, ZBRA, VRTX, BABA, CME, AMP, MSFT, HSY, UHS, KMB, ALNY, RCL, DRI, EA
Bearish Stocks: FDX, AAP, FFIV, XLNX, PLCE, CXS, SAGE, ALB, OLLI
Be sure to check earnings release dates.