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 $15.20
Premium Collected - $3.24
Short Dec 22nd- $16 Call @ $0.45
AMC Long at $15.27
Premium Collected - $1.98
THC Long at $14.63
Premium Collected - $1.70
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Both short calls with last Friday's expiration expired worthless. They were the $17 call on AMC and the $15.50 call on THC. As a result, you have booked the profit you received when you sold the calls.
I will be looking to sell more calls this week. Also, you should be short the $16 call on SNAP that expires this coming Friday.
Now onto the markets.
Just as it appeared that the S & P 500 will not close above the 2,666.05 level, the market gaps up Friday and runs up to a high of 2,679.63. It pulled back slightly to close at 2,675.81.
This was still about 10 points above the 2,666.05 level.
What's interesting is that there were three days that traded over 2,666.05, but all three days failed to close above that level.
It's almost like the market is trying to fool you into shorting. Or I should say tempt you into shorting.
But, this once again demonstrates how that is not the appropriate strategy.
We know that the odds favor a bullish continuation based on the fact that both the 30 and 60 minute charts were uptrending.
And the fact that the market continues to confirm on the upside.
This now sets up a scenario where if the S & P 500 can close above 2,666.05 today, the objective becomes 2,695.30.
At this point, support from last week's weekly price bar should be in the 2,664 to 2,666 area.
Of course, the upper support level is right at the 2,666.05 confirming line, so it should be strong support on a pullback.
The VIX sold off as expected, but still managed to close above the major 9.38 level. It closed Friday at 9.43, just 5 cents above the key support level.
Once again, watching to see what the VIX does here should give us a clue as to what the market should do.
Companies reporting are slowing down. Though we will hear from FDX on Tuesday, after the close.
And we will hear from NKE Thursday, after the close.
Continue to follow the resistance levels.
Here are the Key Levels for the Markets:
$VIX:
Major level: 14.06
Minor level: 13.67
Minor level: 12.89
Major level: 12.50
Minor level: 12.11
Minor level: 11.33
Major level: 10.94
Minor level: 10.55
Minor level: 10.16
Major level: 9.38 **
Minor level: 8.99 <
Minor level: 8.20
Major level: 7.81
The VIX closed at 9.43 on Friday. The high for the day was 10.20, which was just above the minor 10.16 level.
If the VIX breaks under 8.98, a drop to 7.81 is possible. This would be historic, but this bull market has been historic, so
a break to new lows would not be a shock.
9.96 should be resistance.
$SPX:
Major level: 2,695.30
Minor level: 2,685.55
Minor level: 2,666.05 **
Major level: 2,656.30 <
Minor level: 2,646.53 **
Minor level: 2,626.98
Major level: 2,617.20
Minor level: 2,607.43
Minor level: 2,587.88
Major level: 2,578.10
A close today above 2,666.05 and the objective should be to 2,695.30.
Minor support is at 2,668.50. And short term resistance could come in at 2,686.
QQQ:
Major level: 162.50
Minor level: 160.94
Minor level: 157.81 <
Major level: 156.25 **
Minor level: 155.47
Minor level: 153.91
Major level: 153.13
Minor level: 152.34
Minor level: 150.78
Major level: 150.00
The QQQ jumped nicely and closed at 157.65. If the QQQ can close above the 156.25 level for a few days, I would expect a move ultimately up to 175.
For the short term, two closes above 157.81 and the objective becomes 162.50.
Support should be at 156.25.
IWM:
Major level: 156.25
Minor level: 155.47
Minor level: 153.91
Major level: 153.13
Minor level: 152.35
Minor level: 150.78 **
Major level: 150.00 <
Minor level: 149.22
Minor level: 147.66
Major level: 146.88
The IWM closed at 152.24. A close today above 150.78 and the IWM should test 153.
At this point, 151.56 should be support. And 150 as well.
TLT:
Major level: 131.25
Minor level: 130.47
Minor level: 128.91 **
Major level: 128.13 <
Minor level: 127.35
Minor level: 125.78
Major level: 125.00
Minor level: 124.61
Minor level: 123.83
Major level: 123.44
Minor level: 123.05
The TLT took out the 128.13 objective we were looking for. It closed at 128.35 on Friday, just above the price objective.
To move higher, the TLT will need two closes above 128.91.
127.73 is minor support.
GLD:
Major level: 125.00
Minor level: 124.22
Minor level: 122.66
Major level: 121.88
Minor level: 121.10
Minor level: 119.53 **
Major level: 118.75 <
Minor level: 117.96
Minor level: 116.41
Major level: 115.63
The GLD closed at 119.18.
To move up to 121.88, the GLD would need two closes above 119.53. Watch to see if the GLD can clear 119.53.
I would expect resistance at the 121.88 level. And minor resistance is at 119.92.
XLE:
Major level: 73.44
Minor level: 72.66
Minor level: 71.09
Major level: 70.31
Minor level: 69.92
Minor level: 69.14 **
Major level: 68.75 <
Minor level: 68.36
Minor level: 67.58
Major level: 67.19
The XLE closed at 68.72. This was just under the major 68.75 level.
Short term momentum has shifted to the upside. To move lower, the XLE would need two closes under 68.36.
The daily chart is close to crossing into an uptrend. If the daily can cross into an uptrend, I would expect another leg up.
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: 84.96 **
Minor level: 84.55
Major level: 84.38 <<
The FXY dropped to close at 85.27. 85.16 should still be support. Watch to see of this level holds.
84.96 should be minor support. If this level holds, I would expect a move back up to 86. If the FXY breaks under it, a drop to test 84.38 is likely.
AAPL:
Major levels for Apple are 175, 171.88, 168.75, 165.63, 162.50, and 159.38.
Apple held the 171.88 level and moved up to close at 173.97.
175 should be the objective. 172.66 should be minor support.
WATCH LIST:
Bullish Stocks: GOOGL, TSLA, BIIB, LMT, BA, DIA, SPY, COST, RTN, LH, ACN, CLX, CAT, JPM, AFL, MSFT, GILD
Bearish Stocks: VMC, JACK, CLB, KEX, CRH, NFX, TDS, CXW, RRC, RDC
Be sure to check earnings release dates.
