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
UNIT Long at $6.78
UNIT Short Feb 21st Call @ $.30
NTAP Long (2) Feb 14th - $54.50 calls @ $2.07
NTAP Long (1) Fen 14th - $54.50 put @ $2.06
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Yesterday I suggested a straddle on NTAP. The stock is oversold and I am looking for a bounce in the stock ahead of earnings.
I also suggested closing out the debit spread on NET. The result was essentially a scratch.
Yesterday, the S & P 500 bounced back from the long range day on Friday.
The market ended up closing 23.40 points higher. And the daily bar contracted, which of course, is not unusual after a long range day.
The range for the day was 32.78 points. The range actually exceeded the daily average true range, which is 31.32, but was about one half the long range day from Friday.
This does tell us that an expansion should follow.
And pre open, the S & P is trading about 41 points higher.
So, we are getting the expansion before the open.
Assuming this trading holds up through the open, the S & P should open around 3,290.
This would be about 21 points above the high of the long range candle on Friday.
This tells us a few things.
The first is that the high will be violated before the low. I am, of course, referring to Friday's candle. This would suggest that the low of that candle, which is 3,214.68, should be support.
The second thing is that the high of that candle, which is 3,268.44, should now be support.
This type of volatility is certainly not the norm for the market.
But, it now suggests that a retest of the upper band on the daily chart is likely.
Support from yesterday's daily price bar is around 3,252.
Speaking of what is not typical, you only have to look at the trading on TSLA these past few weeks.
I don't recall a stock ever having a short squeeze of this magnitude. In fact, I just read that in the past 7 months, short sellers have lost $8.4 billion. And they lost more than $1.5 million in one day.
Here is what I see from the technical aspect. In January, TSLA broke above the upper band on its daily chart. In December, he retested the upper band when it had a low of $402.08.
Yesterday, TSLA closed at $780 per share. And pre open, it is trading another $105 higher as I write this.
So, since December 31st, TSLA has run $483, or about double. And this has been about a month.
TSLA should open around $885 this morning, which is about $350 above its upper band. This is 65% above its upper band.
This open would be about 24% above its upper band on its 60 minute chart. That level is $715.
I bring this up because it shows you how irrational TSLA is trading. We know that these extreme bands should contain 99.9% of all price action. So, this price action is extremely rare. And personally, I have never seen a squeese like this.
GOOGL did report last night and is trading about $52 lower.
DIS reports this afternoon. BIDU reports Thursday after the close.
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 Friday at 18.05. The VIX got as high as 18.88, but could not close above the major 18.75 level.
We expected a bounce of two levels.
A move up to the next level, which is 21.88 would suggest that we should see higher levels in the VIX. But, it looks like the two level move is suggesting that the pullback is over.
Watch the minor 17.97 level on the downside. Two closes under this level and the VIX should drop to 15.63.
Technical support is around 14.
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
Minor level: 2,929.73
Minor level: 2,851.58
Major level: 2,812.50
The S & P closed at 3,248.92. Today's open should be well above the minor 3,242.15 level. And it should open above the major 3,281.20.
The major 3,281.20 level should be support.
The 3,263 area should offer technical support. And watch for resistance around the 3,312.
QQQ:
Major level: 225.00
Minor level: 224.22
Minor level: 222.69
Major level: 221.91 <
Minor level: 221.13
Minor level: 219.56
Major level: 218.75
Minor level: 218.00
Minor level: 216.43
Major level: 215.65
Minor level: 214.87
Minor level: 213.30
Major level: 212.50
The QQQ closed at 222.38. The QQQ closed above the major 221.91 level. The next level is the minor 221.91 level.
Two closes above 221.91 and the QQQ should move up to 225.
And the upper band is 225.80. As I previously mentioned, the QQQ did take out the upper band on the daily chart, so a retest is expected.
Technical support is at 221. And the 225 area should be resistance.
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 162.32. The IWM closed back above the minor 160.94 level. The next minor level is 164.06. Two closes above this level and the IWM should test 168.75.
The IWM has already moved into a downtrend on its 60 minute chart.
The midband, which is 165, should be resistance. If the IWM can clear this level, it should then be support.
TLT:
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
Major level: 137.50
Minor level: 135.84
The TLT closed at 145.54. The objective should be up to 146.88. But, if the TLT closes under 146.10 today, it should drop to 143.75.
The TLT is still overbought short term. It is trading at its upper band on the 60 minute chart. The upper band is 146.11. A pullback here would be expected.
The midband is 139 and should be support.
GLD:
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
Minor level: 142.97
Minor level: 141.41
Major level: 140.63
Minor level: 139.85
Minor level: 138.28
Major level: 137.50
The GLD closed at 148.36. 147.67 should be support. So, if the GLD has two closes under this level, it should drop.
The 149.22 level be resistance.
149 should be technical resistance. 147.67 should be support.
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 52.74. The XLE had its first close under the major 53.12 level.
The XLE is oversold short term. It is still trading under the lower band on the its 60 minute chart.
This does tell us to expect a retest after a bounce. The lower band is 53.07.
AAPL:
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 308.66. The next minor level is 309.38. Apple should reclaim this level this morning. And if it can trade above 312.50, it should be support.
The 298 area is the midband on the 60 minute chart and should be support.
The 316 area is technical resistance. If Apple can clear this level, it would then be support.
WATCH LIST:
Bullish Stocks: TSLA, SHOP, ADBE, PAYC, MCO, DXCM, APD, CME, NOW, RNG, CRM, DECK, MSFT, HSY, LLY, CBOE, WM
Bearish Stocks: ANTM, ALGN, MMM, FDX, AAP, LEA, FFIV, RL, FIVE, EXPE, CVX, ALXN, DLTR, XLNX, CXO, LOPE, FANG, EXPD, EOG