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
DBX Long at $17.18
CASY Long Jan 17th - $155 Call - $3.90
CASY Short Jan 17th - $160 Call - $1.60
.........................................................................................
Yesterday, I suggested adding two positions. The first was the purchase of shares in DBX.
And the second trade was a long debit spread on CASY.
The upmove for the market continued. Or should I say, the meltup? It is starting to look that way. But, as you know, even though the sentiment indicators are overbought, we still have objectives for the market about 90 points higher than where the S & P closed yesterday.
The day closed out at 3,191.45. The market closed 22.65 points higher. But, the intra day range was 14.08 points. This was because the market gapped about 15 points higher at the open.
The average true range is now 22.75, so if you factor in the gap, the range was right at the average.
And the daily bar closed at 56% of the range.
So, for today, the key support levels to watch should be the close of 3,191.45. This is also right at the midpoint, which is 3,190.
Short term the market is getting overbought. We know this by simply looking at the 60 minute for the S & P and seeing that the market is about 10 points away from the upper band, which is 3,210.
This level should offer resistance and the short term level to watch on the upside.
But, the short term charts all remain bullish, so a pullback would be an opportunity to go long.
The midband on the 10 minute chart is 3,156, which should be support on any pullback. And with a close yesterday about 32 points above it, this tells us that a short term pullback could go about that distance without affecting the uptrend.
What condition should we look for that will tell us a short term pullback is coming?
Very simply, we look at the VIX.
The VIX is back under the major long term support level of 12.50. And yesterday's low went to 11.71, which took out the next minor level by one cent.
For a pullback to occur, we would expect the VIX to move higher. And move above the 12.50 level.
If we do not see these conditions, the market should continue up.
The support area from last week's weekly price bar is still in the 3,155 area, which is right around the midpoint of the 10 minute chart.
Pre open the S & P is trading about 1 point higher.
FDX reports today after the close. And MU reports Wednesday after the close. NKE reports Thursday after the close.
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 sold off again and closed out the day at 12.14. This puts the VIX under the major 12.50 level. To move lower, the VIX would need two closes under 11.72.
12.50 should be resistance, until it is violated. And 13.28 should be resistance as well.
14.25 should offer technical resistance.
SPX:
Major level: 3,281.20
Minor level: 3,242.15
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
The S & P closed at 3,191.45. This was the second close above 3,164.08, which puts the upside for the S & P to the 3,281.20 level.
3,183.59 is a minor resistance level on the upside. A close above the minor 3,183.59 today and the S & P should move up to 3,242.15.
The 3,183.50 level should offer support.
And 3,164 should also be support now. And technical support is around 3,182.
QQQ:
Major level: 212.52
Minor level: 211.74
Minor level: 210.17 **
Major level: 209.39 Hit
Minor level: 208.61
Minor level: 207.04
Major level: 206.25
Minor level: 205.48
Minor level: 203.91
Major level: 203.13
Minor level: 202.35
Minor level: 200.78
Major level: 200.00
The QQQ closed at 209.27. The QQQ hit the 209.29 level. The high for the day was 209.53.
The next minor level is 210.17.
208.61 is minor support. 208 should offer technical support.
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 163.88. The IWM will need two closes above 164.06 to move higher.
162.50 should offer strong support. Not only is it a resistance level, but it is a technical support level.
Short term charts remain bullish, so momentum is still bullish. Same as Friday. The 164 area should be technical support.
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 HIT
Minor level: 135.84
Minor level: 132.81
Major level: 131.25
The TLT closed at 137.79. The TLT will still need two closes above 138.28 to move higher.
Major support is at 137.50, so if the TLT moves under it, expect it to keep dropping.
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 139.04. A break under 138.28 and the GLD should continue lower.
137.50 should be strong support. So if the GLD does break under it, I would expect it to head lower.
The key level is 134.38 on the downside. If the GLD has two closes under this level, it could drop to 125.
Technical resistance is around 140. And the 139.85 level should be resistance.
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 61.12. This was the first close above 60.16, which now implies that if he TLT can close above 60.16 today, it should move up to 62.50.
The XLE also closed just above the midband, which is 60.99. A move up and away from the midband would certainly suggest higher prices will follow.
The 61 area should be technical support.
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 279.86. 281.25 should be the objective for Apple. And Apple is now within $2 of the target.
And minor support should now be at 269.54. And technical support is around 268.
Needless to say that short term trends remain bullish.
WATCH LIST:
Bullish Stocks: GOOGL, SHOP, TSLA, ADBE, AVGO, MA, DPZ, ASML, AAPL, BDX, ZBRA, NVDA, GS, BABA, V, MCD, URI, CB, MSFT, JPM
Bearish Stocks: SPG, SJM, WBA, PLCE, CVLT, CAKE, SAVE, IRM, FL, BEN
Be sure to check earnings release dates.