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.
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 $15.20
Premium Collected - $3.24
Short Dec 22nd- $16 Call @ $0.45
AMC Long at $15.27
Premium Collected - $1.98
UNIT Long at $17
Short January $17.50 Call @ $0.35
..........................................................................................
For someone like me, who prides myself with the ability to read short term turning points in the markets, I have to admit that yesterday completely confused me.
Quite frankly, I expected some resistance overhead and a move lower to a violation of last week's low, before the market headed higher.
The market did the exact opposite.
It gapped up and continued up all day. The market opened at 2,683.73, gapping up 10.12 points higher than Friday's close.
From there, it trended up all day to close at 2,695.81, which of course is 51 cents above the major 2,695.30 level.
Are there some take aways from yesterday that can help us in the future?
The first comment I have is about Friday's price action: Last Friday, the market essentially dropped 12 points in the last 40 minutes of trading. It had been down all day after a gap up open.
This type of price action can happen when there is light trading. Which is one of the reason I typically avoid intra day trading when light volume is expected.
The second comment about yesterday is about the open: The S & P 500 opened at 2,683.73.
I mentioned yesterday that support from last week's weekly price bar should be in the 2,676 to 2,683 area. With an open above that level, it should act as support. And that is exactly what happened.
Support from yesterday's daily price bar is in the 2,689 to 2,690 area.
And the weekly support level should still be relevant.
Continue to follow the resistance levels.
Here are the Key Levels for the Markets:
$VIX:
Major level: 14.06
Minor level: 13.67
Minor level: 12.89
Major level: 12.50
Minor level: 12.11
Minor level: 11.33 **
Major level: 10.94 <
Minor level: 10.55
Minor level: 10.16
Major level: 9.38
Minor level: 8.99
Minor level: 8.20
Major level: 7.81
The VIX close at 9.77. The low for the day was 9.52. This is just above the 9.38 major support level.
9.38 is the level to watch today. On the upside, I would expect resistance at 10.55.
$SPX:
Major level: 2,734.40
Minor level: 2,724.23
Minor level: 2,705.07
Major level: 2,695.30
Minor level: 2,685.55 **
Minor level: 2,666.05
Major level: 2,656.30 <
Minor level: 2,646.53
Minor level: 2,626.98
Major level: 2,617.20
Minor level: 2,607.43
The S & P 500 reversed and took out the major 2,695.30 level.
A close today above 2,693.45 and I would expect the S & P 500 to test 2,702.60.
With a violation of the 2,685 level, this level should now be strong support.
QQQ:
Major level: 162.50
Minor level: 160.94
Minor level: 157.81 **
Major level: 156.25
Minor level: 155.47
Minor level: 153.91
Major level: 153.13
Minor level: 152.34
Minor level: 150.78
Major level: 150.00
The QQQ closed at 158.49, up 1.75% for the day. A close today above 157.81 and the QQQ should test 162.50.
I feel that the ultimate objective for the QQQ is 175.
157 should be minor support.
IWM:
Major level: 156.25
Minor level: 155.47
Minor level: 153.91
Major level: 153.13 <
Minor level: 152.35 **
Minor level: 150.78
Major level: 150.00
Minor level: 149.22
Minor level: 147.66
Major level: 146.88
The IWM closed at 153.90. The IWM still needs two closes above 153.91 to move up to 156.25.
153.13 should offer support.
TLT:
Major level: 131.25
Minor level: 130.47
Minor level: 128.91
Major level: 128.13 <
Minor level: 127.35
Minor level: 125.78
Major level: 125.00 <
Minor level: 124.61 **
Minor level: 123.83
Major level: 123.44
Minor level: 123.05
The TLT closed at 125.49. At this point, 125 should offer strong support. If it is violated, the TLT should head lower.
And minor resistance is at 126.56.
GLD:
Major level: 128.13
Minor level: 127.35
Minor level: 125.78 **
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: 117.96
The GLD closed at 125.15. The GLD tested the 125 level and closed just above it. Watch to see if it can hold this level.
I expect resistance at 125.
123.44 should be support now. 126.56 could offer resistance.
XLE:
Major level: 75.00
Minor level: 74.61
Minor level: 73.83
Major level: 73.44<
Minor level: 72.66
Minor level: 71.09 **
Major level: 70.31
Minor level: 69.92
Minor level: 69.14
Major level: 68.75
Minor level: 68.36
The XLE closed at 73.45. The XLE took out the 73.44 objective by one cent.
72.85 should be now be minor support. And 73.83 could offer some resistance.
The 200 ema and the 253 day average on the daily chart are both 67.03. If the 200 ema can cross above the 253 day average, I would expect move movement to the upside.
FXY:
Major level: 86.72
Minor level: 86.53
Minor level: 86.14
Major level: 85.94
Minor level: 85.75
Minor level: 85.36 **
Major level: 85.16 <
Minor level: 84.96
Minor level: 84.55
Major level: 84.38
The FXY closed at 85.47 A close today above 85.36 implies a move up to 85.94.
85.35 should be support. Also, the midband is 85.80 and price is approaching it from below. It will need to clear this level to move higher.
AAPL:
Major levels for Apple are 175, 171.88, 168.75, 165.63, 162.50, and 159.38.
Apple reversed strongly to close at 172.26, up $3.03 for the day.
The next minor level to the upside is 172.66. Two closes above 172.66 and Apple should head back to 175.
171.09 should be minor support.
WATCH LIST:
Bullish Stocks: LMT, NOC, GD, LLL, FLT, HD, CMI, SWK, CAT, DE, VRTX, UTX, FANG, CRI, VLO, PFE
Bearish Stocks: JACK, DISH, ABM, AGO, JBL, IMAX, WMGI, SSYS
Be sure to check earnings release dates.