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
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DUST Long $4.50
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UNIT Long at $6.78
UNIT Short Feb 21st Call @ $0.30
KEX Long (2) Mar 20th - $75.00 calls @ $2.60
KEX Long (1) Mar 20th - $75.00 put @ $3.10
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Yesterday, the buying slowed down. The S & P 500 closed 11.09 points higher.
The day closed out at 3,345.78. And the range for the day was 13.57 points. This was about 42% of the daily average true range, which now reads 32.27.
And most importantly, the daily price bar turned out to be a narrow range doji bar.
The doji is when the open is approximately the close and is typically a narrow range day.
And yesterday, the market opened at 3,344.92 and closed at 3,345.78. So, the close was within 1 point of the open.
So, how do we interpret this?
First off, a doji can mean indecision. And after a strong run like we just had, it could also mean a pause before the market begins to move again.
And with a narrow range day, we do expect an expansion will be forthcoming.
Pre open, the S & P is trading about 9 points lower. This would project to an open around 3,337.
The projected open would be about 2 points above yesterday's low of 3,334.39.
The low would be a key level to watch. If yesterday's low is violated, I would expect the price to follow through to the downside.
If the market holds support at yesterday's low, I bounce up to the close of 3,345.78 would be expected.
So, the key levels to watch are yesterday's low and close.
If we scope out to look at how the weekly price bar is shaping up, we see that it is profoundly bullish.
The weekly range so far is 112 points. And the weekly average true range is 67 points. The range is 167% of the average, so the odds suggest the range for the week is in.
The midpoint of the weekly bar is 3,292. The market could sell off 56 points and still close above the midpoint which would be bullish.
Another weekly price to watch is 3,295. This is the bearish close from two weeks ago. And if the weekly price bar closes above this level, we would expect the market to continue higher next week.
Finally, another level to monitor is the 75% level, which 3,320. A close above this level would be strongly bullish for the week.
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 14.96. The VIX closed under the 15.63 level.
The next key level is 14.85. Two closes under this level and the VIX should test 12.50 again.
16.41 should be resistance. The 14 area should offer technical support. And technical resistance is at 16.60.
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 3,345.78. This was the second close above 3,320.25 today, which now suggests the S & P should test 3,427.40.
The 3,320.25 level should be support.
The 3,335 area should offer technical support. Short term charts remain bullish.
QQQ:
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
Minor level: 221.13
Minor level: 219.56
Major level: 218.75
Minor level: 218.00
The QQQ closed at 230.19. A close today above 228.91 and the QQQ should move up to 231.25.
The QQQ is still above the upper band on the daily chart. That price level is 227.53. This should now be support.
Technical support is at 229. And the 231 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 166.93. The objective for the IWM should be for a move up to 168.75. And yesterday's high went to 168.15.
The IWM did clear the midband on its 60 minute chart. That price level is now 165.60 and should offer support.
Suppor should be at 164.
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 142.65. A drop to 140.63 should be the objective.
Resistance should be at 143.75. So, if the TLT clears this level, it should head higher.
The 144 area should offer technical resistance.
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 147.40. 147.67 should now be resistance. And the GLD would need two closes under 146.11 to drop to 143.75.
Yesterday's high went to 147.63 or 4 cents under the 147.67 resistance level.
It is now oversold short term. And I would expect a bounce up to the 148 area.
And the 148 area should be technical resistance. 146 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 54.36. The XLE did close above 53.90, so it should test 56.25.
The XLE is bouncing from its oversold condition as we expected.
Technical support should be around 54. And resistance at 58.
AAPL:
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 325.21. Apple did hit the 325 level and managed to close just above it.
The upper band is 333 and is the level to watch on the upside.
The 319 area should offer technical support on a pullback and a great place to get long.
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
