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
X Long at $11.33
DOCU Long Feb $75 Call @ $2.45
DOCU Short Feb $80 Call @ $0.70
UNIT Long at $6.78
UNIT Short Feb 21st Call @ $.30
NET Long February $17.50 call @ $1.45
NET Short February $20.00 call @ $0.55
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I suggested another trade on NET yesterday. Instead of buying the stock, the suggestion was to trade a call debit spread. The February expiration gives us three and one half weeks to allow further up movement in the stock.
The market bounced from its oversold condition. And the bounce went to about the gap level I mentioned yesterday.
The S & P ended up closing 32.61 points higher. And the high for the day ended up at 3,285.78.
The high ended up taking out the midpoint of the gap, which is 3,270. And almost filled the completely. The low of the gap, which I mentioned yesterday, was 3,290. So, the market went to within 5 points of filling the gap.
It is still short of the midband on the 10 minute chart, which is now 3,302. This should be the next upside objective.
And pre open, the S & P is trading about 12 points higher. Assuming this trading holds up until the open, the market should open around 3,288.
This would be above yesterday's high of 3,285.78, but about 17 points below the midband on the 10 minute chart.
The projected open would almost fill the gap. This is the first level that could offer resistance today.
If the market keeps running, the next level should be the midband of 3,302.
And the midband could provide resistance. If the S & P clears this level, then it should continue to run.
Yesterday's range was 32.56, which is greater than the daily average true range, which is now 26.62. A range greater than the average is generally a bullish sign.
And the day closed out at 71% of the daily bar, which of course, suggests that the high should be violated before the low. This should happen at the open, assuming the pre market trading holds up until the open.
Support from yesterday's daily bar should be in the 3,266 to 3,270 range.
3,307 is the midpoint of Friday's bearish long range daily bar. It also happens to be around the midpoint of the 10 minute chart. This area is a key level to watch today. And as I mentioned above, if the market can clear this level, I would expect it to continue higher.
Apple reported last night and is trading about 5 points higher. Boeing reported this morning and is trading about 6 points higher as well.
This afternoon should be quite important for the market because we get earnings from a number of tech heavyweights, including FB, MSFT, PYPL and TSLA.
The week closed out with AMZN reporting Thursday afternoon.
Today at 2:00, we also get the FOMC decision on interest rates.
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 16.28. I mentioned the minor 17.97 level yesterday. And suggested that if the VIX closed under it yesterday, that should drop to 15.63.
Yesterday's low of 15.69 went to within 6 cents of it.
Watch to see if the VIX breaks under this level today. If it can, I would expect it to head lower and the market to continue higher.
17.97 should be resistance. And the 13.28 area could provide support.
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 3,276.24. The market should open above 3,281, which would suggest it is support.
The next minor level to the upside is 3,320.25. Two closes above this level and the S & P should continue higher.
At this point, the low for this sell off was on Monday, when it stopped at 3,234.50. This was 7.65 points lower than the major 3,281.20 level.
After clearing a major level, the minor level under it often acts as support. The market did not stop exactly on it, but it was within 8 points of it.
Technical support is around 3,264. Watch the gap levels I mentioned above.
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 221.45. The QQQ did clear 221.91, but could not close above it. If the QQQ can clear this level, it should be support.
The minor 222.69 level is the next level to watch. Two closes above this level and the QQQ should move up to 225.
222.55 is the midpoint on the 10 minute chart. If the QQQ can clear this level, it should head higher.
220 should offer technical support.
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 164.87. This now implies that if the IWM can close above 164.06, it should head higher.
The upper band is 169.22 and should now be resistance.
The 164 area should provide technical 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 143.16. The TLT took out the 143.75 objective and yesterday, close back under it.
The TLT will need two closes under 142.97 to drop to 140.63.
The TLT would have to reclaim 143.75 to head higher. The 141 area should offer technical support.
The TLT is pulling back from its short term overbought condition.
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 147.66. If the GLD breaks under 146.89, I would expect it to head lower. And a close today under 149.22 would suggest a move to 146.89.
Watch the 146.11 level on the downside. This should offer support, but if the GLD breaks under it, I would expect it to continue lower.
Like the TLT, it is overbought in the short term.
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 Hit
Minor level: 55.86 **
Minor level: 55.08
Major level: 54.69
The XLE closed at 55.30. If the XLE cannot hold 55.08, I would expect further selling pressure. But, yesterday it manage to close just above it.
This now suggests that if the XLE can close above 55.08, it should move up to 56.25.
Technical support is at 55.
The midband, which is 59, should now be resistance.
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 317.69. If Apple can close above 315.63 today, it should move up to 325.
After reporting last night, Apple is trading about $7 higher, which would put Apple right at the 325 level.
Watch for a pullback around the 325 area.
The 317 area should offer technical support.
WATCH LIST:
Bullish Stocks: GOOGL, TSLA, SHOP, LMT, ADBE, MA, FLT, AAPL, COST, LRCX, RNG, ADSK, V, GD, DECK, KLAC, HSY
Bearish Stocks: REGN, BA, ALGN, AAP, FFIV, CVX, XOM, CMA, QURE, FSLR, RAMP, HLF, CLB
