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
.........................................................................................
You should only have one open position for today. And that is the short $12 call on VALE.
VALE settled yesterday at just over the strike, at $12.03. Hold the position and if I suggest an adjustment, you will receive a separate email.
I mentioned yesterday that the market appeared tired. This was because of the combination of doji bars recently and the range contractions.
And the market did pullback a bit. For the day, it closed at 2,774.88, down 9.82 points for the day.
And the range for the day was only 17.03 points. Compared with the average true range of 29.61, yesterday was another contraction.
So, even though the market pulled back, the selling pressure was not that strong.
And the S & P 500 managed to rally back late in the day to close at 61% of the daily bar. This does put the odds of violating yesterdays high before the low.
And the support area from yesterday is in the 2,773 to 2,777 area.
Pre open, the market is trading about 11 points higher. So, the S & P 500 should open above this support area. This would suggest that it would offer support on a pullback.
And yesterday's price action did hold above the midband which should still act as a support line. That price is now 2,733.44.
The weekly bar is shaping up as a contraction. But, with the short trading week, this is not too unusual.
Last week's high was 2,775.66 and should offer support.
It looks like we will get the largest earnings move of 2019, so far. And that is the trading action on STMP. Pre open, STMP is trading down 49% or $97.
This is a massive move.
And speaking of massive moves, one of your fellow members emailed me and mentioned the selloff on UNIT.
UNIT is a stock we have traded and on the last webinar, I showed the move it made off the December bottom. It rallied about 40% before the top preceding this selloff.
Just a few thoughts about the stock.
First off, if you get a 42% move in about a month, I highly advice booking the profit. Had you done that, you avoided the selloff.
Now the stock is trading below its lower bollinger band on the daily chart.
This clearly tells us the stock is oversold.
And the selling has been enormous. In the last three days, UNIT has turned over 87 million shares.
When you consider that the average volume is about 3 million shares, the selling has been 10 times the normal trading activity.
The other way to look at this is to compare it to the public float.
UNIT has about 178 million outstanding.
The recent selling resulted in turning over about one half the public float.
That means that one of every two shareholders has now bought in the last three days.
This should usually establish a floor in the price.
This may not be the exact bottom, but you know it is close.
The real key, at least to me, is if they can sustain their 60 cents per quarter dividend.
If they do, it would mean the stock is yielding about 24% at yesterday's price.
But, the caveat is will this dividend be sustained?
I would want some more clarity on this.
The last dividend of 60 cents was paid on 1/18/19. The question is will they continue at this rate?
But, the call options remain strong, so if UNIT can move back above the lower band, a covered call would be the trade.
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 14.46 yesterday. This was the second close under 14.85. This now suggests that the VIX should test 12.50.
Yesterday's low was 13.85 and broke under the 14.06 level we were looking for.
13.28 could offer minor support. And 14.84 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 S & P 500 managed to close just above the minor 2,773.40 level. This level should continue to offer support.
The S & P 500 should open just above the minor 2,783.20 level. Watch to see if this holds. If it can't, a test of 2,773 is possible.
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 171.62 yesterday. The upside objective is still to 175.
171.48 is minor support. And if the QQQ clears 171.88, 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 156.79. The midband is 156.16, and the IWM continues to trade just above it. This level should be support.
The next minor level is 157.81. Two closes above this level and the objective should be to 162.50.
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 120.85. A close today under 121.49 suggests a drop to 120.31.
Support should be at 120.31.
The 60 minute chart has crossed into a downtrend. Momentum is shifting to the downside.
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 125.05. The GLD closed back under the major 126.56 level.
A break under 124.61 and the GLD should head down to 123.
The 123 to 124 area should offer technical 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 65.57. The XLE will need to recoup the 65.63 level to head higher.
62.50 should offer major support. Technical support is around the 64 to 66 area. Short term charts remain bullish.
A break under 65.23 and the XLE should head lower.
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 86.19. The midband is now 86.71. The midband should still be resistance.
And 86.72 should offer resistance.
Short term charts remain bearish. And the daily chart is also bearish. This would suggest resistance at the 86.71 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
Predicted High: 173.05
Predicted Low: 169.07
Apple closed yesterday at 171.06. At this point, I am expecting a move up to 175.
Apple needs to recoup the minor 171.09 to move higher.
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.