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 - $0.46
Short March 1st-$9 Call @ $0.20
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 sell the $9 call on RIG that expires next Friday. Even though the premium was not that large, it still puts some cash in your account. And I would rather take it than pass on it.
For tomorrow, there is one open position and that is the short $12 call on VALE. I will follow up tomorrow if I suggest an adjustment to the position.
The S & P 500 did manage to close slightly higher on the day. But the close percentage from Tuesday gave a slight nod to violating Tuesday's high before the low.
For the day, the market closed 4.94 points higher to close at 2,784.70. This now puts the market within 30 points of the next upside objective.
But I must admit that this is starting to look like a market that is really tired.
I say that because yesterday was the third consecutive day of range contractions. Usually not a good sign and a warning that the market may be setting up for a reversal.
And yesterday's daily bar formed a doji bar which can mean indecision.
And the VIX is also heading back down to its long term support level of 12.50. Yesterday is closed at 14.02, so it's now within reach.
At this point, it may be helpful to review the trends on various price charts.
The weekly chart is still bullish. In fact, the pullback we had in December came down to the 200 ema on the weekly chart and found support there.
The daily chart is bearish, with the 200 ema under the 253 sma. But, they have flattened out, which is a bullish sign.
If the daily chart does cross into an uptrend and becomes aligned with the weekly chart, it would suggest higher prices will follow.
And price did take out the midband on the daily chart, which as you know is bullish and now suggests that the midband should be support.
The shorter term 30 and 60 minute charts are both bullish.
These are the two key charts I track for short term trading, along with the 10 minute chart.
The 10 minute chart also happens to be bullish, so buying against support still makes sense for this market.
And technical support should be around 2,750 if the market does pullback.
Because of the doji bar yesterday, you want to monitor the close which was 2,784.70, along with the high and low which were 2,789.88 and 2,774.06. 2,782 to 2,785 should be a key area for today.
And last week's support level in the 2,740 to 2,744 area should continue to offer support on a pullback.
Pre open, the S & P 500 is trading about 3.50 points lower.
Today after the close we will get earnings from BIDU and OLED, along with STMP.
Yesterday's big earnings move was WIX which was down 11.6%.
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
The VIX closed at 14.02 yesterday. This was the first close under 14.85, which suggests that a close today under 14.85 and the VIX should test 12.50.
We were looking for a move down to 14.06, and the VIX complied with us on that.
Minor support should be at 13.28. And technical resistance is at 15.33.
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.
14.85 should now be resistance.
SPX:
Major level: 2,890.60
Minor level: 2,871.08
Minor level: 2,832.03
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
The upside objective should be 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.
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 172.25 yesterday. The upside objective is now 175.
170.31 should now be support. And 171.88 should be major support as well. And 168.75 should be major support.
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 157.39. The midband is 156.14, and the IWM continues trade just above it.
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.
156.25 should be strong support on a pullback.
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 121.94. This now suggests that if the TLT can close above 122.27, it should challenge 123.44.
The TLT is holding just above the major 121.88 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 126.48. The GLD close back under 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. The daily chart is close to crossing into an uptrend.
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 66.60. This was the first close above 66.41. This now implies that if the XLE can close above 66.41, it should test 68.75.
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 86.07. The midband is now 86.72. 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.
If the FXY breaks under 85.94, I would expect a drop to 84.
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 172.03. 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.