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 $.55
RRC Short Feb 15th - $12.00 Call @ $0.25
RIG Long at $8.81
RIG hort Feb 15th - $9 Call @ $0.26
.........................................................................................
Friday, you should have been assigned on the $17 call on FEYE. The profit has been booked.
We also added a weekly covered call on RIG. The suggestion was to buy RIG and sell the $ 9 call that expires in two weeks.
Last Friday, the S & P 500 closed slightly higher. It closed up 2.43 points at 2,706.53.
This literally puts the S & P 500 right at the objective we have been talking about.
And that objective is the midband on the daily chart.
The midband is now 2,731.22 and the high for Friday was within 15 points of it.
The question now is, what do we expect?
Well, we know one of two things will happen.
Either the market clears the level or it fails. If it fails, A retest of the lower band would be the logical objective.
The lower band is 2,457 so it would be a move of about 250 points if that scenario came to be.
The other scenario is that price clears the midband.
If that were to happen, then the logical target would be to the upper band. The upper band is 3,005 so the market could move about 300 points if it takes out the midband.
The question is what do we do?
At this point, patience is the virtue.
I say that because we know the scenarios that can happen.
So it is just a matter of waiting to see which scenario will occur.
Can we get clues from other markets?
Yes. For example, the DOW has cleared the midband. The NASD Composite hasn't and the QQQ is literally sitting right at the midband.
What is interesting is that the VIX has broken through the midband and is now trading under it.
If the VIX leads the other markets, then it does suggest that the markets should clear the midband.
We will know it a few days.
The support area from Friday is in the 2,703 to 2,706 area.
And the support from last week's weekly bar is in the 2,670 to 2,576 area.
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 16.09. For the day, it was down 0.48 points.
That puts the VIX within 40 cents of the 15.63 level. 15.63 is still the objective for the VIX.
As I said, the VIX broke through the midband which is 17.33 and should now be resistance.
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
At this point, 2,695 should be support. And minor resistance is at 2,734.
As I said, the key at this point is the midband. Pre open, the market is down slightly.
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
As I mentioned above, the QQQ is literally sitting right at the midband.
The midband is 169.13 and Friday's high was 168.60.
Just like the S & P, the key will be if the QQQ can clear the midband.
165.63 should be support. And if the QQQ can clear the midband, look for it to move higher.
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 149.18. This puts the IWM within 40 cents of the 150 objective.
The midband is 156, so the IWM is the market that is the farthest from the midband. I would expect if the other major marekts can clear the midband, then the IWM will as well.
146.88 is minor support.
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 120.96. The TLT hit the 121.88 objective.
At the moment, minor support is at 120.70 and 120.31. A break under this area would suggest that the TLT will head lower.
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 124.50. The GLD did hit the 125 objective again.
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 64.89. The XLE is now within 40 cents of the 65.63 objective.
64.06 should now offer minor support. 67.19 should offer minor resistance.
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 87.21. Testing the midband form above. That level is 86.81. Of course, a break under the midband would suggest a further decline.
86.72 should be support. And resistance should now be at 87.50.
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 166.52. Apple has now moved up about $27 off the bottom.
With short term charts in uptrends, look to go long on a pullback.
At this point, the next pullback would be an opportunity to go long.
162.50 should offer support.
WATCH LIST:
Bullish Stocks: REGN, ULTA, WCG, OST, VRTX, WDAY, ZBRA, AMT, CRM, DECK, ADP, MOH, LLY, DTE, CCI, UAL
Bearish Stocks: ATHM, KMX, QCOM, WTW, URBN, SIG, GES
Be sure to check earnings release dates.