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 - $1.25
Short December $20 Call - $.30
NCR Long Jan 16 $27 Call
Net Debit - $.80
X Long at $14
Total Premium collected - $.89
ASNA Long at $14.20
Total Premium collected - $.75
LUK Long December $18 Call - $.35
ETE Long $14.05
Short December $15 call - $.30
VNR Long $2.97
Short December $3 Call - $.30
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The S & P 500 bottomed at 1,993.26, which was within one point of the 1,992.18 minor support level.
All major markets bounced yesterday off the tremendous oversold condition they were in.
We can tell that because the S & P 500 was under the bottom band on the 60 minute chart.? The bottom band is 2,014.47, so the S & P exceeded that level by just over 21 points.
The QQQ stopped right at the bottom band yesterday, which indicates that once again it is stronger than the S & P 500.
The bands set up certain scenarios.? For example, at this point, I would expect a run to the mid band, which for the S & P 500 is 2,073.
I would also expect a retest of the low at some point.
Remember, tomorrow we get the long awaited Fed announcement regarding raising interest rates.
How the market reacts should indicate where it goes from here.
The other event shaping up this week is triple witching day this Friday. Apparently, the volume on options expiring Friday is the largest it has been in quite some time.
Expect excess volatility this week.
Here are the key levels for the markets.
?
VIX:?
Major level - 28.13
Minor level - 26.56
Major level - 25.00
Minor level - 23.44
Minor level - 20.31 *
Major level - 18.75
The VIX stalled yesterday at 26.81, just a few cents above the 26.56 level before reversing down.
The VIX was way above the top extreme band on the 60 minute and pulled back yesterday to the top band.? Actually, it is still above the top band.
The top band is 22.64 and the VIX closed at 22.73.
It should drop under the top band and try and retest the top band.
Two closes above 26.56 and the VIX should climb to 31.25.? However, watch the 28.13 level to see if it acts as resistance.? I expect strong resistance at 28.13.
S & P 500 Cash Index:?
?
Major level - 2,062.50
Minor level - 2,054.68
Minor level - 2,039.10
Major level - 2,031.30
Minor level - 2,023.48
Minor level - 2,007.82
Major level - 2,000.00
Minor level - 1,992.18
The S & P 500 closed at 2,012.94 yesterday.
If it can close above 2,007.82 today, the objective should be to 2,031.30
2,039 should act as resistance.
Nasd 100 (QQQ):?
Major level - 115.63
Minor level - 114.85
Minor level - 113.28 *
Major level - 112.50
Minor level - 111.72
Minor level - 110.16
Major level - 109.38
Minor level - 108.60
Minor level - 107.03
Major level - 106.25
The QQQ stopped to the tick at 109.38 yesterday before rallying to close at 111.63.
Objective should be back to 112.50.
TLT:?
Major level - 125
Minor level - 124.22
Minor level - 122.66
Major level - 121.88
Minor level - 121.09
Minor level - 119.53 *
Major level - 118.75
Minor level - 117.97
Minor level - 116.40
Major level - 115.62
The TLT dropped yesterday to the 121.88 support level.
It will need two closes under 121.09 to drop to 118.75.
GLD:
Major level - 106.25
Minor level - 105.46
Minor level - 103.91
Major level - 103.13
Minor level - 102.34
Minor level - 100.78
Major level - 100.00
Major level - 96.88
The GLD continues to bounce between 103 and 100.
Two closes above 103.91 and it should move up to 106.? Two closes under 102.34 and it should drop back to 100.
Still in a downtrend.
XLE:
Major level - 65.63
Minor level - 64.85
Major level - 62.50
Minor level - 61.72 *
Minor level - 60.16
Major level - 59.38
Minor level - 59.60
A close today above 60.16 and the objective is 62.50.
56.25 is the major downside level that most likely will not be violated on the first attempt.
Apple:
Major levels for Apple are 125, 118.75, 112.50, 106.25, 100, and 93.75.
106 should be a major support level for Apple.?
Apple hit $109.79 yesterday before reversing and closing just two cents under the 112.50 level.? Two closes above 114.06 and it should move back up to 118.75.
Watch list:
Bullish Stocks: CI, TSN, ELS, CUBE, PANW, HD, CLX
Bearish Stocks: CELG, FFIV, BMRN, PVH, KSU, AXP, DVA, BG, WSM, CMI, BLUE, KEX, AKAM, OUTR, CF, CLH, WES
Be sure to check earnings release dates.