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
SNAP Long at $14.54
Total Premium Collected - $1.65
OI Long Feb $19 call @ $1.70
MDR Long @ $9.31
DIS Long Jan 25th $107 Call @ $3.35
DIS Long Jan 25th $107 Put @ $3.10
X Long at $20.30
X Jan 18th - $21.00 Call @ $0.50
RRC Long at $11.85
RRC Short Jan 25th - $12.00 Call @ $0.30
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After a bearish gap open of almost 13 points, the market sold off the remainder of the day.
The high for the day of 2,657.88 came right at the open. And the low for the day of 2,617.27 came at 3:00 EST.
The end result was a range of 40.61 points. This was still less than the average daily range of 46.69 points.
A range equal to or greater than the average would indicate more bearishness.
But, the low came to just under the weekly support level of 2,622.94.
The question now is will this hold as support?
Pre open, the S & P 500 is trading about 14 points higher, so at this point, it is possible that we have seen the weekly low. The key for today will be to watch the 2,623 level if the market does pullback.
If the market does retest this area, the question will be will it hold as support.
I have a simple rule if I plan to go long. If there is a bearish gap open, it voids the long scenario.
It is a rather simple rule but I have found that you are far better off waiting after a bearish gap than to think about jumping into the market.
And as it turned out yesterday, the market trended down all day after the bearish gap.
So, once again this simple rule prevented you from jumping the gun if you planned to go long.
For today, the resistance area is in the 2,637 to 2,645 area. And as it turned out, the close percentage was 38%. So, there is a slight edge for yesterday's low to be violated before the high.
Yesterday, we got earnings from IBM and they are trading about $8.50 higher before the open.
And yesterday, Stanley Black & Decker reported and sold off 15.48% off their earnings.
Continue to monitor the levels as I mentioned above.
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 moved up 16.85% to close at 20.80 for the day. At this point, the VIX will need two closes under 17.97 to drop to 15.63.
On the upside, the key level is 19.53. A close today above that level and the VIX should test 21.88.
18.75 should now offer support.
The VIX did bounce off the midband. As you know, this level is typically support on the first test.
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
The S & P 500 closed under the minor 2,636.75 level. The key will be to see if the S & P 500 can reclaim this level.
If it can't, it would suggest a drop to 2,578.
Minor levels for the S & P 500 are 2,656.30 and 2,616.20 which were virtually the high and low for yesterday.
The projected open is around 2,645. If the market sells off, watch the 2,636.75 level as an area of support.
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
The QQQ closed at 161.94. The QQQ will still need two closes above 164.06 to move up to 168.75.
Watch to see if the QQQ can reclaim the 162.50 level. If it can, it should be support.
The midband on the daily chart is 169.22 and the QQQ is approaching it.
Technical support is at 159.86.
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 145. The objective for the IWM is still to 150.
Watch the minor 145.31 level today. If it can reclaim this level, it should offer support.
141.11 should be technical support for the IWM.
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 120.37. 119.92 should be support. And two closes above 120.70 and the TLT should move up to 121.88.
The daily chart did cross into an uptrend. This suggests that buying the next pullback makes sense.
118.75 should be strong support on the TLT.
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 121.45. The GLD will still need two closes under 121.10 to drop to 118.75.
121.88 should still be resistance. Minor support is at 120.31. A break under this level and the GLD should head lower.
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 62.45. This put the XLE back under the major 62.50 level. Watch to see if the XLE can reclaim this level.
62.89 is minor resistance. And 62.11 is a minor support level.
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 87.24. It will need two closes above 88.48 to move higher. And two closes under 86.72 and the FXY should drop.
The FXY will need to clear 87.50 to move higher.
Still biased for a move lower. A break under the midband and the FXY should continue lower. The midband is now 86.81.
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 153.30. Biased for a test of 150.
156.25 should be resistance. A break under the minor 153.13 level and the XLE should continue lower.
WATCH LIST:
Bullish Stocks: CMG, REGN, AVGO, AMGB, VRTX, CRM, DXCM, RH, WIX, ROST, NKE, SQ, THS, CIEN, BSX
Bearish Stocks: MTN, LGND, VOD, ORAN
Be sure to check earnings release dates.