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
ASNA Long at $14.20
Total Premium Collected $0.75
DUST Long $4.50
Total Premium Collected $0.70
RRC Long at $11.85
Total Premium Collected $0.70
RRC Long at $9.20
RIG Long at $8.81
Premium Collected - $1.45
FEYE Long at $17.18
Total Premium Collected $1.06
CDAY Long March 20th - $75 Put @ $3.00
CDAY Short March 20th - $70 Put @ $1.25
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Three positions were closed out on Friday. The short calls on UNIT were exercised and the stock was sold at $7.50.
The return worked out to 17% for holding the stock for about three weeks. The cash return, if you traded the suggested 500 shares, worked out to $570.
I also suggested you close the ZEN straddle. The one-day return was about 9%.
Finally, I suggested closing the IRBT straddle. The stock was not moving as expected and it was better to close and move on. This resulted in a $580 cash loss if you traded the suggested position size in the original alert.
The news this morning is the spread of the virus and the effect it is having on the markets.
Pre open, the S & P 500 is trading about 78 points lower. The DOW is trading about 700 points lower. And the NASD Composite is trading about 250 points lower.
This is all a reaction to the growing pandemic and concerns worldwide that the virus is spreading.
As you know, we have been monitoring how extreme this market had become. Specifically, the key technical situation was that the markets were up against their upper band on their daily chart. The QQQ actually traded above its upper band.
And all markets were up against their upper band on their weekly charts.
These levels tell us how oversold the markets have been.
Friday, the S & P 500 closed at 29% of the daily bar. So, the odds favored a violation of the low before the high. And with an anticipated open about 78 points lower, this will no doubt happen right off the open.
The question is where could support possibly come in?
The market should open around 3,260.
There are a few price levels that would be important to monitor. The first is that last pivot low, which is 3,215.
A test of this pivot low is quite possible.
The other technical level would be 3,177. This is the lower band on the 60 minute chart for the S & P 500.
The midband is 3,300 and the S & P should open beneath it. This level would be resistance on a rally.
I do want to caution you if you plan to trade intraday. With extreme swings come extreme risk. Especially if you consider that put options should become highly inflated.
The weekly price bar closed at 14.3% of the range of the weekly price bar. So, the conditions were in place for a violation of last week's low before the high.
In looking at the weekly price bars, the key price level on the downside should be 3,235.66. The market should open about 25 points above it.
This area could offer support. And on a bounce, the 3,300 area should be resistance.
DE reported Friday and closed $11.60 higher. And FSLR reported was closed $8.73 lower.
Earnings do continue this week. PANW reports this afternoon after the close. SHAK also reports this afternoon.
CRM reports tomorrow after the close.
BKNG reports Wednesday after the close and SQ also reports the same day.
Here are the Key Levels for the Markets:
$VIX:
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
Minor level: 11.72
Minor level: 10.16
Major level: 9.38
The VIX closed at 17.08 on Friday. A close today above the minor 16.41 level and the VIX should run up to 18.75.
No doubt, the VIX will open higher this morning. The question is how high.
19 is the upper band on the 60 minute chart. Technical support is around 14.50.
S & P 500:
Major level: 3,427.40 <
Minor level: 3,398.35
Minor level: 3,320.25 **
Major level: 3,281.20
Minor level: 3,242.15
Minor level: 3,164.08
Major level: 3,125.00
Minor level: 3,085.95
Minor level: 3,007.85
Major level: 2,968.80
The S & P closed at 3,337.75. The S & P closed 35.48 points lower. And the market should open about 80 points lower.
The projected open should put the market around 3,258. Watch to see if the S & P falls under the minor 3,242 level.
And with an open under 3,281. it should be resistance.
Technical resistance should be at 3,303.
QQQ:
Major level: 234.38
Minor level: 233.60
Minor level: 232.03
Major level: 231.25
Minor level: 230.48
Minor level: 228.91
Major level: 228.13
Minor level: 227.35
Minor level: 225.78
Major level: 225.00 <
Minor level: 224.22 **
Minor level: 222.69
Major level: 221.91
The QQQ closed at 230.27. The QQQ not only closed under the upper band, but it closed under the minor 230.48 level.
The QQQ projects to open under the 225 level. Watch the minor 224.22 level. A break under this level and the QQQ should drop to 221.
Also, 233.97 is the upper band on the daily chart, and the QQQ should open under it. It should now be resistance.
224 is also a key technical level for today. If this level can't hold, it should head lower.
IWM:
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
Minor level: 151.56
Major level: 150.00
The IWM closed at 167.10. The IWM should open right around the major 162.50 level.
Watch the 162.50 level. If it can't hold, it should head lower.
160.03 is the prior pivot low and should be tested.
161 is the lower band on the 60 minute chart.
TLT:
Major level: 150.00
Minor level: 149.22
Minor level: 147.66 **
Major level: 146.88
Minor level: 146.10
Minor level: 144.53
Major level: 143.75
Minor level: 142.97
Minor level: 141.41
Major level: 140.63
Minor level: 139.85
Minor level: 138.28
The TLT closed at 148.04. A close today above 147.66 and the TLT should test 150.
The TLT should take out 150 at the open. The upper band on the 60 minute is 150.36.
A break above the upper would suggest it will be retested.
GLD:
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: 147.67
Major level: 146.89
Minor level: 146.11
Minor level: 144.54
Major level: 143.75
The GLD closed at 154.70. The GLD took out the 153.13 level.
A close today above 153.91 and the GLD should test 156.25.
The GLD should take out 156.25 at the open. Watch for support there.
Momentum remains bullish. But, short term, the GLD is overbought and I would expect a pullback.
XLE:
Minor level: 63.28
Major level: 62.50
Minor level: 61.72
Minor level: 60.16
Major level: 59.38
Minor level: 58.60
Minor level: 57.03
Major level: 56.25
Minor level: 55.47
Minor level: 53.90 **
Major level: 53.12 <
Minor level: 52.34
Minor level: 50.78
Major level: 50.00
The XLE closed at 54.14. The XLE should open around 52.50 this morning. Watch the minor 52.34 level. A break under this level and the XLE should drop to 50.
53.78 is a key support level. If this can hold, look for the XLE to continue to bounce. If it can't, look for a further drop.
56 should offer technical resistance. And technical support is around 50.
AAPL:
Major level: 337.50
Minor level: 334.38
Minor level: 328.13
Major level: 325.00 <
Minor level: 321.88 **
Minor level: 315.63
Major level: 312.50
Minor level: 309.38
Minor level: 303.13
Major level: 300.00 <
Minor level: 296.88
Minor level: 290.63
Major level: 287.50
Minor level: 284.38
Apple closed at 313.05. Apple hit the 312.50 objective we were looking for.
Apple should open about $12 lower. It should open around $300. Based on this open, Apple should open below the prior pivot low, which is 301.50.
This would suggest more selling pressure.
The 315 area should offer technical resistance on a rally. And 290 should offer support.
WATCH LIST:
Bullish Stocks: CMG, TSLA, DPZ, MA, COST, NVDAm DXCM, LULU, VRTX, HD, V, CRM, STMP, DG, AXP, ROST, DGX
Bearish Stocks: VRSN, EEFT, W SPR, MNRO, XOM, LNG, NTAP, CREE, CSCO, CCL, R
