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
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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Yesterday, I suggested booking the profit on the DOCU position. The position was held for a week and returned 71% for the week.
The market continued higher in the morning to try and fill the gap objective that I had mentioned. The low of the gap is 3,289.62. This was the next objective after taking out the midpoint of the gap.
The S & P got as high as 3,293.47 yesterday before selling off.
So, it took out the gap by 3.85 points. Remember that these are resistance levels I look at. The market will not always stop exactly on the level. And you should not expect it to. I know there have been certain instances where that does happen, but it is not the norm.
After topping out, the market sold off and hit a low of 3,271.89.
The range for the day ended up being 21.58 points. This was less than the daily average true range, which is 26.26 points. This shows the selling pressure was not that intense.
But, the day closed at 7% of the daily bar. This, of course, suggests that yesterday's low should be violated before the high.
And based on the pre market trading, that should certainly be the case.
The market is trading about 25 points lower pre-open.
This would project an open about 23 points below yesterday low. So, the close requirement will certainly be met at the open.
The question is where could support come in?
The projected open would be about 6 points above the minor 3,242.15 level. Watch to see if this level holds as support.
We know that if the S & P does have two closes under 3,242.15, it should drop to 3,125.
The VIX should help us to determine if the market will find support. I woul expect a retest of the 18.75 level. If the VIX cannot get through 18.75 and reverses to the downside, it should signal the market is holding support.
On the downside, the S & P has a bullish open gap at 3,245. This is within 3 points of our minor resistance level and it also a natural price objective.
Resistance from yesterdays daily bar is in the 3,281 area.
TSLA reported last night and is trading about $52 higher. TSLA is probably the most overbought stock I have ever seen.
With an open about $52 higher, it would put the price around $633 or about $130 above the upper band on the daily chart, or 26% above the upper band.
Remember that the extreme bands should contain 99.9% of the price action, so a move 26% above it is extremely rare.
It goes without saying that the shorts have been seriously squeezed.
FB also reported last night and is trading $17 lower off their report. And MSFT is trading about $6 higher after reporting.
This afternoon we will get earings from AMZN.
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 16.39. Yesterday's low went to 14.94 or just above the minor 14.85 level.
At this point, look for possible resistance at 17.97 and 18.75. If these levels are violated, I don't see it moving above 19.53.
Also, 19.27 is the upper band on the 10 minute chart, which most likely will be retested today.
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 3,273.40. The market should open just above 3,242. Wait to see if it holds as support.
If the market does break under 3,242, I would expect it to continue lower. But, as I mentioned above, there is multiple support around the minor 3,242 level.
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.
If the gap and the minor level does not hold, the next objective would be to the lower band on the 10 minute chart, which is 3,225.
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 221.81. The QQQ did stop right at the midband on its 10 minute chart. That price level is 222.40 and yesterday high went to 222.93.
Watch the minor 221.13 for support. If it can't hold, it should head lower.
There is an open gap at 218.23. And the lower band is 217, which should be 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 163.93. Watch for resistance at 164.06. And possible support at 160.94.
If the IWM has two closes under 160.94. it should drop to 156.
The upper band is 169.22 and should now be resistance.
The 162 area should provide technical support, which is right around the major 162.50 level.
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 144.56. The TLT had its first close above 144.53. A close today above it suggests a move up to 146.88.
With the TLT reclaiming 143.75, it should now be support.
The TLT did pull back from its short term overbought condition and it heading back up.
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 148.46. With the GLD closing above 147.67. This suggests that if the GLD closes above 147.67 today, it should test 150.
147.67 should be support.
There is also technical resistance around the 150 level as well.
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 54.72. The XLE could not hold 55.08. Watch the major 54.60 level today.
It looks like the XLE will make a run to the lower band on the daily chart,. That level is 52.
However, the XLE is oversold short term and is right at the lower band on the 60 minute chart. That level is 54.75, which is very close to the major 54.69 level.
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 324.34. If Apple did take out 325, hitting a high of 327.85 before selling off.
Watch the 321.88 level on the downside. If this level cannot hold, I would expect further selling.
Technical support is at 318.
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
