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.
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After gapping down at the open, the S & P 500 appeared to be finally getting a round of profit-taking.
But, with the strength of this market, it did bottom out and actually managed to close higher.
The day closed out 3.79 points higher. And the intra day range was 25.01 points which was greater than the daily average true range, which is now 20.46.
And the day closed out at 3,325.54 and at 95% of the range of the daily price bar. This of course, now suggests that yesterday's high should be violated before the low.
And pre open, the S & P is trading about 7 points higher, so no doubt the high should be violated at the open.
The low yesterday came in at 3,301.87. This was about 2 points above the previously identified support level from last week's weekly price bar.
The level I had mentioned a few times this week was 3,300.
Knowing where support should be on the higher timeframe can be helpful to pinpoint where the logic suggests you buy.
In looking at how the weekly price bar is forming, we see that at this point, it is forming a doji bar.
The week opened at 3321.03 and yesterday's close was 3,325.54. So, the market is only about 4 points higher through yesterday.
And the range for the week so far is only 35.90. Granted, we have only had 3 trading days this week, but still the market had contracted.
The weekly average true range is 60.25. If the weekly price bar moves to the average, it would project a high today of around 3,362.
The midpoint of the weekly price bar so far is 3,320 and should be a support level.
And the support from yesterday's daily price bar is in the 3,320 area as well.
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 12.98. This was the third close above 12.50 in three days. But, once again, it still had not managed to close above 13.28.
Yesterday's high went to 14.15, before dropping to close at 12.98.
I would at the very least expect the VIX to close above 13.28 to signal a pullback. Two closes above it would be even more indicative of a top.
So this should still be resistance until it is violated. And technical resistance is at 13.70.
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 3,325.54. The S & P managed to close above the minor 3,320.25 level, once again. This should be a support level.
Because the market has confirmed a move higher, I am still biased to the longside.
The 3,427.40 objective should still be the target. Watch for support at the major 3,281.20 level.
Technical support is around 3,313.
QQQ:
Major level: 225.00 <
Minor level: 224.22
Minor level: 222.69 **
Major level: 221.91 HIT!
Minor level: 221.13
Minor level: 219.56
Major level: 218.78
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 224.59. The objective for the QQQ should still be for a move up to 225.
But, like the S & P, the QQQ is right at the upper band on the daily chart. It actually closed above the band, which is now 223.43. This should be support.
221.91 should be support. And technical support is at 222.
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 167.45. The next upside level is 170.31. Two closes above this level and the objective should be to 175.
For the IWM to drop to 162.50, it will need two closes under 167.19. And the IWM managed to close back above it.
The upper band is 168.98 and the IWM closed under it. This level should now be resistance.
168 is now technical resistance. The IWM would need to clear this level to head higher. If it can't, a run down to 165 is possible.
TLT:
Major level: 143.75
Minor level: 142.97
Minor level: 141.41
Major level: 140.63 Hit
Minor level: 139.85
Minor level: 138.28
Major level: 137.50
Minor level: 135.84
Minor level: 132.81
Major level: 131.25
The TLT closed at 140.94. The target of 140.63 was hit.
The next minor level is 141.41.
The 142 area should be resistance. And technical support is around 139.
GLD:
Major level: 150.00
Minor level: 149.22
Minor level: 147.67
Major level: 146.89 Hit
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 147.12. Watch the major 146.89 level. If the GLD can clear this level, it should move higher.
146.89 should now be minor support. And 146.50 should be technical 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: 55.86
Minor level: 55.08
Major level: 54.69
The XLE closed at 57.28. The XLE got as low as 56.45 before rebounding. And if the XLE can close above 57.03, the XLE should move up to 59.38.
The midband, which is 59, should now be resistance.
The XLE is oversold short term and a bounce should be expected. If it does bounce, it could go to around 59.
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 319.23. The objective for Apple should be for a move up to 325. But, I will throw caution to the wind by saying that Apple, like the the major indexes, is righ at the upper band on its daily chart.
The upper band is now 319.06 and Apple is just above it.
315.63 should offer support.
The 315 area should offer technical support.
WATCH LIST:
Bullish Stocks: GOOGL, TSLA, SHOP, LMT, NOC, NTES, ADBE, AAPL, NOW, LRCS, COST, MA, AAPL, LRCX, INTU, BDX, NVDA, FB, HD
Bearish Stocks: FICE, CVX, CLB, MDP, TEX