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
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Today's Working Orders
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Yesterday the markets contracted after the large range day from Monday.
The positive is that the S & P 500 managed to close slightly above the 2,062.50 level, at 2,063.11.
The VIX also stayed below the 20.31 level I mentioned.
If it managed to get above 20.31, I would expect further selling in the markets.
On a short term basis, all the major markets are oversold.
How do I know this?
Very simply, they are all sitting right around the lower extreme bollinger band.
I mentioned the selling climax the markets had yesterday.
This indicates to me that a bottom is close.
I would have started to nibble on some VXX calls today, but have held off because of the Non Farm payroll coming out Thursday.
In fact, had I suggested a position, I would have pulled it off today because of the report on Thursday.?? ?
Here are the key levels for the markets.
Stocks...
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VIX:? Key levels are 21.88, 18.75 and 15.63
Short term levels:? 19.53 and 17.96
The VIX would have to close above 19.53 for two days to see if move up to 21.88.
Two closes under 17.96 and it will drop to 15.63.
20.31 would be a difficult level for the VIX to violate.? If it can, expect the markets to head lower.
16.41 should be a level of support.
Where the VIX opens tomorrow should help determine the days movement.
An open under 18.75 and expect that level to be resistance.
A close above and it should be support.
But be mindful that 20.31 should be a strong level of resistance.
S & P 500 Cash Index: ?
Key levels are 2,093.80, 2,062.50 and 2,031.30
As I have been saying ... "The S & P 500 could drop down to 2,062.50 and the bull market would still be intact.? In fact, a reversal around that area would create opportunity."
Yesterday, the S & P closed just above it.? So far this is just a chink in the armor of the bull market.
What I did not say is what could make me feel that the bear is starting to move in.
I think a move to 2,031.30 would make me feel that perhaps this is more than just a pullback.
Tomorrow's open should help determine the next move.
Yesterday was a doji candle following a long range candle.
Typically, if the market opens lower, it should drop. And the magnitude could be rather severe.
A higher open would negate that.
But the VIX can help to determine what should happen, so watch the VIX levels.
On the upside, the next key price is 2,072.32.? Two closes above that price and the it should head higher.
On the downside, the key level is 2,054.68.? Two closed under that level and the S & P should head to 2,031.30.
Also, 2046.90 is a key price.? If this is breached, the S & P should head lower.
The lower extreme band on the 60 minute chart is 2,064.85 and the S & P closed under it.? Ideally you would want to see a close above that price on a short term chart before initiating any longs.
Nasd 100 (QQQ):? .
The QQQ closed yesterday at 107.07, just above the 106.25 support level.
Support is at 106.25 and 105.46.? If 105.46 cannot hold, it could drop to 103.13.
Resistance is at 107.81.
A close tomorrow above 107.03 and the QQQ should retest 109.38.
TLT:? The TLT stopped 5 cents under the 118.75 level yesterday, to close at 117.46.
A close under117.96 today and the TLT should drop back to 115.63.
Major levels are 118.75 and 115.63.
The level after 118.75 is the 122 area.
My suspicion is that the TLT is going to bounce around a range for a while.? I could be wrong but the TLT has been bouncing between the 118.75 and 115.63 levels.
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GLD: Key levels are 115.63, 114.06, and 112.50.
The GLD continues to hover around the 112.50 level.
Yesterday, it close at 112.37, just under the 112.50 level.
112.11 is level just under it.? Two closed under 112.11 and the GLD should drop to 110.94.
XLE: Key levels are 78.13, 75, and 71.88
The XLE closed back above the 75 level yesterday, at 75.16.
75.78 is the upside level and 74.22 is the downside level.
Watch list:
Bullish Stocks: DPZ, UHS, NKE, FB, FL, SHOO, DE, LLY, HLF
Bearish Stocks: PCLN, CMI, DDS, MON, CVX, WDC, SNDK, WYNN, GMCR, SNDK and QCOM
