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
ASNALong at $14.20
Total Premium Collected $0.75
DUST Long $4.50
Total Premium Collected $0.70
SNAP Long at $14.54
Total Premium Collected - $1.65
OI Long Feb $19 call @ $1.70
MDR Long @ $9.31
RRC Long at $11.85
Total Premium Collected $0.55
RRC Short Feb 15th - $12.00 Call @ $0.25
FEYE Long at $16.70
FEYE Short Feb 1st - $17 Call @ $0.40
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Yesterday, you should have added two positions. I suggested you sell the February 15th - $12.00 call against the RRC position.
And I suggested you close the FCX debit spread for an overnight return of about 50%.
For today, you should have one position that expires, assuming you sold the $17 call against the FEYE position.
FEYE is above the strike, so allow the calls to be assigned. The return will be 4.2% for about a week and one half.
Yesterday closed out the month of January with a gain of 23.05 points. The S & P 500 closed at 2,704.10.
This puts the S & P 500 within 30 points of the next objective which is 2,734.40.
The other fact is that we are approaching the midband on the daily chart. That price level is 2,731.97 and is the price I have been saying will be the level the market will test. And now we are almost there.
I know when we were trading under 2,500, you doubted that the S & P 500 would rally up to the 2,730 level. But this is the pattern with the bands.
When the lower band is violated, the bounce will typically go to the midband.
We know one of two things happen.
Either the market will reverse off the midband or it will get through it.
The nice part for us is that we don't have to guess what it will do. We just wait to see how the market reacts.
For the day, the S & P 500 closed at 84% of the daily bar. This tells us that the odds are just over 80% that yesterday's high will be violated before the low.
The support area from yesterday's daily bar is in the 2,693 area.
As for the January monthly price bar, it ended up being an inside bar.
The range for the month was 265 points, but it actually exceeded the average true range which is 168 points.
But an inside day does tell us that the market should expand.
And the market is almost back to the upper band on the monthly chart. That price level is now 2,775.78 and yesterday closed about 70 points under it.
The question is, will the market clear that level?
Quite frankly, I don't know.
But, I don't have to guess. I just need to know where this level is and know that either one of two things will happen.
Either the market will get through the upper band or it will fail it. These are the only options.
So, be aware of these important levels.
Amazon reported and is down about $80 before the open. The projected move was about $95, so it did not move as much as was projected.
Here are the Key Levels for the Markets:
$VIX:
Major level: 25.00
Minor level: 24.22
Minor level: 22.66
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
The VIX closed at 16.56. For the day, it was down 1.09 points.
More importantly, the VIX closed under the midband on the daily chart. That price level is 17.33. So, now it should be resistance and it should suggest that the market will continue higher.
At this point, I expect the VIX to test 15.63.
SPX:
Major level: 2,734.40 <
Minor level: 2,714.88
Minor level: 2,675.83 **
Major level: 2,656.30 <
Minor level: 2,636.75
Minor level: 2,597.65
Major level: 2,578.10
Minor level: 2,558.58
Minor level: 2,519.53
Major level: 2,500.00
The objective for the S & P 500 should be up to 2,634.40. And as you know, this is very close to the midband.
2,690 should be minor support. And 2,727 could offer resistance on the upside.
QQQ:
Major level: 175.00
Minor level: 173.44
Minor level: 170.31
Major level: 168.75 <
Minor level: 167.19
Minor level: 164.06 **
Major level: 162.50 <
Minor level: 160.94
Minor level: 157.81
Major level: 156.25
Minor level: 154.69
The QQQ closed at 168.16. Yesterday's high took out the 168.75 objective. the high was 168.99.
And the midband on the daily chart for the QQQ is now 169.13, so the QQQ is within one point of it.
If the QQQ can clear the midband, it would suggest that the other markets will as well.
167 should offer support.
IWM:
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
Minor level: 142.19
Minor level: 139.06
Major level: 137.50
Minor level: 135.94
Minor level: 132.81
The IWM closed at 149.06. The IWM is within one dollar of the 150 objective.
146.88 should be minor support.
Short term charts remain bullish.
TLT:
Major level: 123.44
Minor level: 123.05
Minor level: 122.27
Major level: 121.88 <
Minor level: 121.49
Minor level: 120.70 **
Major level: 120.31 <
Minor level: 119.92
Minor level: 118.14
Major level: 118.75
Minor level: 117.97
Minor level: 116.41
Major level: 115.63
The TLT closed at 121.97. The TLT hit the 121.88 objective.
122.66 should be minor resistance and 121.48 minor support.
120.50 should be technical 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: 117.97
Minor level: 116.41
Major level: 115.63
The GLD closed at 124.75. Yesterday's high took out the 125 level we have been looking for.
At this point, the GLD is overbought and the odds favor a move lower.
But, support should be at 122.66.
XLE:
Major level: 71.88
Minor level: 71.10
Minor level: 69.53
Major level: 68.75
Minor level: 67.97
Minor level: 66.41
Major level: 65.63 <
Minor level: 64.85
Minor level: 63.28 **
Major level: 62.50
Minor level: 61.72
Minor level: 60.16
Major level: 59.38
The XLE closed at 63.78. This now suggests that the XLE should test 65.63.
63.28 should now offer minor support. And if the XLE can clear 64.84, it should head higher.
FXY:
Major level: 89.84
Minor level: 89.65
Minor level: 89.26
Major level: 89.06
Minor level: 88.87
Minor level: 88.48 **
Major level: 88.28
Major level: 87.50 <
Major level: 86.72
Major level: 85.94
Minor level: 85.75
Minor level: 85.36
Major level: 85.16
Minor level: 84.97
The FXY closed at 87.65. With yesterday's strong move, it implies that the midband held as support.
87.50 should be support. And minor resistance should be at 88.67.
AAPL:
Minor level: 173.44
Minor level: 170.31
Major level: 168.75
Minor level: 167.19
Minor level: 164.06
Major level: 162.50 <
Minor level: 159.38
Minor level: 153.13 **
Major level: 150.00
Minor level: 146.88
Minor level: 140.63
Major level: 137.50
Apple closed yesterday at 166.44. It was up $1.19 after jumping off their earnings.
At this point, the next pullback would be an opportunity to go long.
162.50 should offer support. And 165.63 should offer support as well. Short term charts are now bullish.
WATCH LIST:
Bullish Stocks: CMG, REGN, AVGO, WDAY, EW, VRSN, VMW, VRSK, XLNX, CHKP, WIX, YUM, CNI, NKE, SQ, WELL, ZEN
Bearish Stocks: FFIV, WB, DOX, QCOM, SIG, BITA
Be sure to check earnings release dates.