While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to 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.
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WDCLong Feb 15th $40 Call @ $1.96
WDC Short Feb 15th $45 Call @ $0.60
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The market continued to tick higher yesterday. The S & P 500 closed 11.68 points higher to close at 2,596.64.
I do believe the close was rather significant for this move.
First of all, yesterday was the second consecutive close above the major 2,578.10 level.
Because the market was able to close above this major level, it should indicate that the next lower level which is 2,500 should be strong support on a pullback.
The market was not able to close above the next minor level which is 2,597.65. The market came short of closing above this level by 1.01 points. But, it did in fact hit the level, as the high for yesterday was 2,597.82.
2,597.82 is the next minor level. Two closes above this level would suggest a move up to 2,656.30.
But with a close above 2,597.82, the next minor lower level of 2,558.58 should also be support, in addition to 2,578.10.
For the day, the S & P 500 closed at 97% of the daily bar. This puts the odds of violating the high before the low at almost 100%.
The support area from yesterday's daily bar is in the 2,580 to 2,585 area.
If we scope out to the weekly price bar, we see that so far, the weekly price bar has had a range of 73.26. The weekly average true range is 101.11.
Assuming, the weekly price bar moves to the average, it would project to a weekly high of 2,625.67.
This would exceed the high of the bearish long range weekly bar from a few weeks ago, which was 2,601.13.
If this projection holds true, I would expect a run to the midband on the daily chart which is now 2,741.40. As I have said before, this should be resistance, so this will certainly be an area to watch closely as this bounce continues.
I mentioned the 60 minute chart for the S & P 500 yesterday and how it was still in a downtrend. And that price was below the midband. The midband is 2,603.95 and yesterday's high was just under it.
The market does need to clear this level to move higher.
But with the 30 minute chart in an uptrend, I am biased for the midband to be violated.
Pre open, the S & P 500 is trading about 8 points lower. This projects to an open around 2,588.
Continue to monitor the levels as I mentioned above.
Here are the Key Levels for the Markets:
$VIX:
Major level: 28.13
Minor level: 27.35
Minor level: 25.78
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
The VIX closed at 19.48 for the day. Biased for a move down to 18.75.
21.88 should now be strong resistance. And minor resistance is at 20.31.
15.63 should offer support.
SPX:
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
Minor level: 2,484.38
Minor level: 2,453.13
Major level: 2,437.50
Minor level: 2,421.88
Look for 2,578.10 to offer support. And 2,597.65 is the next minor level on the upside.
Minor support should be at 2,587.88. Watch this level today.
QQQ:
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
Minor level: 148.44
Minor level: 145.31
Major level: 143.75
The QQQ closed at 161.28. The 162.50 level should still be the objective.
159.38 and 157.81 should offer minor support.
Like the S & P 500, the 30 minute chart is bullish and the 60 minute chart is bearish. However, price is still trading above the midband on the 60 minute chart which is now 159.94.
IWM:
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 143.64. The IWM effectively hit the 143.75 objective. Ok, it fell 3 cents short, but that is close enough to say it was hit.
The IWM will need to move up to the 143.75 level for me to consider this downtrend has ended.
If the IWM can clear 143.75, this move should most likely continue.
Support should be a 140.63.
TLT:
Major level: 125.00
Minor level: 124.61
Minor level: 123.83
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
The TLT closed at 120.46, down 0.78 on the day. Yesterday's low came to within 3 cents of the 120.31 objective. Like the IWM, close enough to say it was hit.
120.31 should be a strong support level. If the TLT does break under it, I would expect it to 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 121.59. Watch to see if the GLD can clear the 121.88 level. If it can, I would expect if to head higher.
At this point, if the GLD can close above 122.66 for two days, it should test 125.
121.48 should offer minor support. Trading just above it.
XLE:
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 <
Minor level: 58.60
Minor level: 57.03
Major level: 56.25
The XLE closed at 62.38. The high for the day came within 4 cents of the 62.50 level.
Clearing 62.50 would be bullish. But, at this point, it is resistance.
59.38 is major support.
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 88.07. It closed down 0.34 on the day. It will need two closes above 88.48 to move higher.
The FXY will still need two closes above 88.48 to move higher.
87.50 is a key level for the FXY. I would expect strong support at 87.50. And 87.89 is minor support.
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 down at 153.80. It should now test 162.50.
153.13 should now be support. And 151.56 should also be support if Apple violates 153.13.
WATCH LIST:
Bullish Stocks: HLF, GCO, AHL, NLY, AGNC
Bearish Stocks: ADBE, MMM, ALGN, BIDU, ASML, BABA, LGND, UPS, TXN, GRUB, ALB, SWKS, AKAM, AABA, CERN
Be sure to check earnings release dates.