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
RRC Long at $11.85
Total Premium Collected $0.70
RIG Long at $8.81
Premium Collected - $0.26
VALE Long at $11.85
Premium Collected - $0.30
VALE Short Feb 22nd - $12 Call @ $0.30
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Yesterday, I suggested you close the NLS position. The result was a gain of about 6% for 8 days. Even though NLS is oversold, I did not want to run the risk of an adverse move ahead of earnings.
Better off to book the profit and look at the deal again after earnings.
The S & P 500 managed to close 4.16 points higher on the day. It closed at 2,779.76 or 33 points of the next objective.
With a bearish gap open and a close percentage of 100% on Friday, the odds of taking out Friday's high was extremely likely. This was also confirmed with the bullish short term chart formations.
And with a close above 2,753.93, the active upside objective does become 2,812.50.
There are two things to watch today. The major news announcement is the release of the FOMC Minutes today at 2:00 EST.
As you know, this type of news release can produce volatile results.
The other key for today is that both the VIX and the S & P 500 closed to the upside. This is a divergence and usually foretells of a change in direction. It at least puts us on notice that a direction change is possible.
But with the S & P 500 trading above the midband, I would expect that level to offer support if there is a change in direction. The minor 2,753.93 level should also offer support.
And last week's support level in the 2,740 to 2,744 area should continue to offer support on a pullback.
Yesterday's daily close percentage was 62%, so there is still a bias to take out yesterday's high before the low.
And the support area from yesterday is in the 2,774 to 2,777 area.
Pre open, the S & P 500 is trading about 2.50 points lower.
Wednesday after the close, we will hear from NTES.
And Thursday after the close, we will hear from BIDU and OLED.
Yesterday, WMT reported and was up 2.21% off their earnings.
And as you know, this is a short trading week with all markets closed on Monday.
Here are the Key Levels for the Markets:
$VIX:
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 <
Minor level: 14.85
Minor level: 13.28
Major level: 12.50
I had the VIX closing at 14.96 after the close yesterday. This morning when I checked, it had changed the print to 14.88.
I know this may not seem like a big difference, but it is the difference between a divergence and the expected close relationship with the S & P 500.
For the VIX to head lower, it will need to break under 14.85.
And two closes under 14.85 and the VIX should drop to 12.50.
The minor 15.23 level should offer resistance today.
If the VIX can stay under 15.23, I would expect a drop to 14.06.
SPX:
Major level: 2,812.50 <
Minor level: 2,792.98
Minor level: 2,753.93 **
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
With a close above 2,753.93 yesterday, I would expect a move up to 2,812.50.
Minor support is still at 2,763.70. If that level cannot hold, I would expect 2,751.50 to hold. There is a minor support level at 2,775.90 as well.
Short term charts remain bullish.
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 172.28 yesterday. The upside objective is now 175.
170.31 should now be support. And 171.88 should be major support as well.
If the QQQ can hold above 172.27, look for it to move higher.
IWM:
Major level: 162.50
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
Minor level: 142.19
The IWM closed at 156.65. This was the second close above the daily mdiband which is 156.12.
Watch to see if the IWM can clear 156.25. If it can, I run to 175 is possible.
The next minor level is 157.81. Two closes above this level and the objective should be to 162.50.
The upper band is 181.45.
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
The TLT closed at 122.29. This now suggests that if the TLT can close above 122.27, it should challenge 123.44.
122.07 is a short term support level.
123.05 is minor resistance on the upside.
The 60 minute chart is still bearish but is very close to moving into an uptrend.
GLD:
Major level: 128.13 ***
Minor level: 127.74
Minor level: 126.95
Major level: 126.56 <
Minor level: 126.17
Minor level: 125.39
Major level: 125.00
Minor level: 124.22
Minor level: 122.66
Major level: 121.88
Minor level: 121.10
Minor level: 119.53
The GLD jumped and closed at 126.70. This put the GLD above the major 126.56 level.
128.13 should be strong resistance for the GLD. But, it can clear it, I would expect it to move higher.
125 should now be support.
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 66.32. Now that the XLE has cleared 65.63, look for support at that level. And this level should still be support.
62.50 should offer major support. Technical support is around the 64 to 66 area. Short term charts remain bullish.
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 86.24. The midband is now 86.74. The midband should still be resistance.
86.72 should offer resistance.
However, short term charts remain bearish. And the daily chart is also bearish. This would suggest resistance at the 86.74 level.
AAPL:
Major level: 187.50
Minor level: 184.38
Minor level: 178.13
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: 159.38
Minor level: 153.13
Major level: 150.00
Apple closed yesterday at 170.93. At this point, I am expecting a move up to 175.
The 168.75 level offer should still be strong support. If it fails at 168.75, I would not expect a drop under 162.50. 170.31 is minor support.
Biased for a move up. Continuing to look for an entry.
WATCH LIST:
Bullish Stocks: CMG, CHTR, AVGO, NOW, COST, ZBRA, ADSK, CRM, CLX, ADP, EW, RHT, AAP, DECK, DATA, LLY, DG, KMB
Bearish Stocks: NTES, TTWO, GT, FOSL, URBN
Be sure to check earnings release dates.