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
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APA Long Oct $47.50 Call at $3.45
APA Short Oct $52.50 Call at $1.10
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Yesterday saw a small follow through in the market, after recouping the 2,421.88 level on Friday. The S & P 500 hit a high of 2,432, before moving down to close at 2,427.43.
At this point, the 2,421.88 level should act as support.
Based on the fact that the shorter term charts for the S & P 500 are in different trend formations, we should expect some bouncing around before a trend begins again.
The 60 minute is hanging onto to an uptrend, but the 30 minute chart is trending down.
Yesterday's high stopped right at the midband on the 30 minute chart. That level happens to be 2,432.94, compared to the day's high at 2,432.
And before this last run began, price was under the lower band on the 30 minute chart, so a retest of the lower band is quite possible. The lower band is 2,410.
But, we need to look at various levels of possible support. As I mentioned, the 2,421.88 level should be a support level.
We also have the 2,420 to 2,423 area from last week's weekly price bar. With the market just above this level, wait to see if the market can hold in this area. A reversal of the VIX to the downside should confirm a bottom around that level.
11.72 should be a level to watch on the VIX. The has already confirmed a move back to retest the 9.38 level, but a bounce here would not be unexpected.
Earnings are slow this week, with the exception of a few major banks on Friday. Friday we will hear from Citigroup, Wells Fargo and JP Morgan.
Continue to follow the resistance levels.
Here are the Key Levels for the Markets:
$VIX:
Major level: 18.75
Minor level: 17.97
Minor level: 16.41
Major level: 15.63
Minor level: 14.84
Minor level: 13.28
Major level: 12.50
Minor level: 11.72
Minor level: 10.15
Major level: 9.38
With the VIX confirming a move to the downside, I would expect higher levels to act as resistance. The downside objective should be to 9.38.
11.72 should be resistance. If that does not hold, I would expect 12.50 to still offer resistance.
$SPX:
Major level: 2,500.00
Minor level: 2,484.38
Minor level: 2,453.12
Major level: 2,437.50 **
Minor level: 2,421.88 <
Minor level: 2,390.62
Major level: 2,375.00
Minor level: 2,359.38
Minor level: 2,328.12
Major level: 2,312.50
Watch the 2,421.88 level today. If that does not hold, 2,414 could. At this point, 2,437.50 should be resistance.
QQQ:
Major level: 143.75
Minor level: 142.18
Minor level: 139.06
Major level: 137.50 <
Minor level: 135.94 ***
Minor level: 132.81
Major level: 131.25
The QQQ closed at 138.66, just under the 139.06 minor level. To move higher, the QQQ will need two closes above 139.06.
137.50 should continue to offer support.
139.84 could offer resistance.
IWM:
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: 136.72
Minor level: 135.16
The IWM closed above the minor 139.85 level again. 139.65 should be support. The objective should be to 140.63.
141.02 should be minor resistance.
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: 124.22
Minor level: 122.66 <
Major level: 121.88
The TLT closed at 122.90 yesterday. A close above 122.66 implies a move up to 125.
125 should still be resistance and 121.88 is the major level to the downside.
GLD:
Minor level: 122.66
Major level: 121.88
Minor level: 120.32
Minor level: 119.53
Major level: 118.75
Minor level: 117.97
Minor level: 116.41
Major level: 115.63 <<
Minor level: 114.85
Minor level: 113.28
The GLD closed again under the 115.63 level, at 115.47. I would expect 116.41 to act as resistance.
To move lower, the GLD will need two closes under 114.85. Daily trend remains bearish.
XLE:
Minor level: 69.53
Major level: 68.75
Minor level: 67.97
Minor level: 66.41
Major level: 65.63 <<
Minor level: 64.85
Minor level: 63.28 **
Major level: 62.50
Minor level: 61.72
With two closes now above 63.28, the XLE should try and test 65.63. But, I would expect that level to act as resistance.
The major 65.63 level should also be resistance. Also, short term resistance is at 64.45. If it clears this level, it should run up to 65.23.
FXY:
Minor level: 87.89
Major level: 87.50
Minor level: 87.11
Minor level: 86.33
Major level: 85.94
Minor level: 85.55
Minor level: 84.77 **
Major level: 84.38 <
Minor level: 83.60
Minor level: 83.20
Major level: 82.81
The FXY closed just under the major objective, which was 84.38.
To move lower, the FXY would need two closes under 83.60. 83.98 could offer minor support.
The trailing stop I suggested has you locking in profits if you followed the short set up we have been discussing. You should have a nice profit on the short by now. Email me and let me know how you are doing.
AAPL:
Major levels for Apple are 162.50, 156.25, 150, 143.75, and 137.50
143.75 should now offer support. And the minor 142.97 level should also offer support. After this pullback, I will be looking to initiate a long.
Short term momentum remains bearish.
WATCH LIST:
Bullish Stocks: PCLN, GS, FDX, BA, STZ, LLL, CMI, CP, MCD, AET, VRTX, MCO, KSU, TSO, VRSN, MTOR
Bearish Stocks: AZO, ORLY, SJM, CASY, CVX, AAP, JACK, DG, SLB, QCOM, TSCO
Be sure to check earnings release dates.