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 - $2.79
AMC Long at $15.27
Premium Collected - $1.788
THC Long at $14.63
Short Dec $15.50 call @ $0.30
Premium Collected - $1.70
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The DOW closed to the upside, while the S & P 500 closed slightly to the downside. The S & P 500 ended the day closing at 2,639.44, down 2.78 points for the day.
This was after gapping up almost 15 points. This price action is not surprising considering the fact that the S &P 5 00 had been trading above the upper bollinger band on its 30 & 60 minute charts.
The market that has been hit particular hard is the NASD. The NASD Composite sold off 1.05%, closing 72.22 points to the downside. The QQQ sold off 1.15%, closing down 1.78 points.
A lot of the high flying individual NASD stocks fared even worse.
For example, NVDA was off $11.02. It closed down 5.57%. And ALGN, another high flying NASD stock was off $28.27. If closed to the downside 11.13%.
Does this spell the end of the bull market?
After the run that some of these NASD stocks have made, you have to wonder when profit taking would set in.
Take NVDA for example. It traded for $24.42 last February before it made its historic run to $218. That is an 800% gain in just under two years.
ALGN traded for $57 last February. It ran to a high of $266 before selling off. That is a gain of almost 400%.
After stocks make runs this this you have to think they will pullback. And that is what you are seeing at the moment.'
By the way, both NVDA and ALGN are trading above the upper extreme bollinger band on their weekly charts. This alone should make you concerned about a possible pullback.
When this price action occurs, adding put protection is not a bad idea, if you don't plan to liquidate your holdings.
I am still biased for another rally. The question is where should support be.
For the S & P 500, we know that support from last month's price bar is around 2,630. And from last week's weekly price bar, support is in the 2,622 to 2,628 area.
Even with yesterday's close at 2,639.44, the S & P is about nine point above the monthly support level.
The short term 30 and 60 minute charts for the S & P 500 remain firmly in uptrends, so I do expect another rally once the market finds support.
And with price trading above the upper bands on the short term charts, the odds highly favor another rally.
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
11.72 should be minor resistance for the VIX. And 12.50 should still be major resistance.
Watch to see if the VIX can hold 11.33 today. If it can, a retest of 12.50 would be likely.
$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 under 2,646.53 and the S & P should test 2,617. Minor support should be at 2,636.
The next level on the upside is 2,666.05. Two closes above that and the objective should be to 2,695.30.
Watch to see if the S & P can regain 2,646.53.
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: 152.35
Minor level: 150.78
Major level: 150.00
The QQQ closed at 152.71. At this point, the key level is 152.34. If the QQQ closes under 152.34, a retest of 150 is likely.
153.91 should now be resistance.
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 152.45. The IWM closed back inside the upper band on the daily chart. Generally, not a great area to enter long and at the least, consider profit taking.
150.00 should be major support. A break under 152.35 and the IWM could continue down.
TLT:
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 closed at 126.61. The major 125 level should be support. The 128.13 level should be the objective.
Minor support is at 125.78.
GLD:
Minor level: 125.78
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
The GLD closed at 121.18. I would expect resistance at 122.27 and an objective down to 118.
Minor resistance is at 121.88.
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 69.65. The XLE took out the 70.31 level.
71.09 could offer minor resistance. And minor support is at 69.14.
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 closed at 85.29. 84.77 is the key price on the downside. A break under that level and the FXY could head lower.
85.94 is now resistance.
AAPL:
Major levels for Apple are 175, 171.88, 165.63, 162.50, 159.38, and 156.25.
Watch for support at 168.75. If Apple violates 168.75, look for a mvoe down to 162.
Clearing 171.88 would indicate a move back to 175.
WATCH LIST:
Bullish Stocks: BA, HUM, MMM, BDX, ANTM, LLL, COST, URI, HON, CME, DE, MCK, CAT, CBOE
Bearish Stocks: TAP, WIX, OTEX, OFC, MDCO, AKR, CLI, ERJ, INN
Be sure to check earnings release dates.