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
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DUST Long $4.50
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SNAP Long at $15.20
Premium Collected - $2.79
AMC Long at $15.27
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THC Long at $14.63
Short Dec $15.50 call @ $0.30
Premium Collected - $1.70
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All major markets retreated yesterday. The S & P 500 closed to the downside 9.87 points. It closed at 2,629.57.
With the second consecutive close under 2,646.53, this sets up a scenario where a drop to 2,617.20 is likely.
The major question at the moment is this ... is this end of the bull market and just a normal pullback?
I don't think so. And I say that for a few reasons.
The first is that a drop to 2,617 would be a one level drop. The S & P 500 could drop to the 2,578 level and that would be a normal pullback for a bull market.
A drop to 2,539 would make me a bit concerned that the dynamics of this marke is changing.
I also say this is a normal pullback because both the 30 minute and 60 minute charts for the S & P 500 are still uptrending. And both had price trading above their upper extreme bollinger bands. This favors another rally after support is found.
The final reason I say this is still a normal correction is because the VIX has barely registered a major pop. I suspect you could say the jump to 14.58 the other day was a big move, but the VIX is still contained by the 12.50 resistance level.
I would expect a larger climb in the VIX if this were not a normal pullback.
Finally, the market is approaching support from last month's monthly price bar and last week's weekly price bar.
For the monthly price bar, the support level is around 2,630.
And for the weekly price bar, the area is 2,622 to 2,628.
Yesterday's close put the S & P 500 right at this area. If the market can recoup the upper end, look for support in that area.
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 11.30, just under the minor 11.33 level. The high for the day was 5 cents under the 11.67 level.
The VIX would still need two closes above 11.33 to move up to 12.50, which should still be resistance.
10.16 is a minor support level and 11.72 continues to be minor 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
With yesterday's close under 2,646.53, the S & P should test 2,617. Minor support should be at 2,612.30. And strong support at 2,600.
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 closed at 152.81, holding above the 152.34 level. 152.34 should be support. If it cannot hold, a move to 150 would be 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 150.93. 150.00 should be major support. Watch to see if this can hold. If it can't a drop to 146 would be possible.
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 127.24. The TLT came within 63 cents of the 128.13 objective. Look for it to get hit today.
Minor support is at 126.95.
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 120.32. A close today under 121.10 and the objective becomes 118.75.
Minor resistance is at 120.09.
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 69.35. Minor support is at 69.14. If that level cannot hold, I would expect 68.75 to.
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 85.30. Oversold short term. Look for support at 85.16 and a bounce.
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. Yesterday's low was 168.40, before Apple recovered. Watch the 168.75 level.
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.
