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.
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OI Long Nov $17 Call for $1.25 OI Short Nov $20 Call for $0.35 DDD Long at $14.60 DDD Short July 13th-$15 Call at $0.25 ..........................................................................................
You should have closed out the long call position on BAC yesterday. The return was about 28% for eight days.
The S & P 500 continued to follow through to the upside and closed at 2,793.84. For the day, the S & P 500 was up 9.67 points.
With the S & P 500 now closing for two days above 2,783.18, support should be at that level and at 2,773.40.
The range for the day was only 10.34, indicating this bull move maybe running out of steam. Compared with a daily average true range of 25.0, yesterday's range was less than one half of the average.
Pre open, the S & P 500 is trading about 20 points to the downside. And the DOW is off about 200 points.
This is not all that shocking because yesterday I said this ... "The only item of concern at the moment is that the VIX is back down to its long term support level.
The 12.50 level is typically the level that the VIX bounces. It could drop down and test the major 9.38 level. For the VIX to test 9.38 it will first have to break under 12.50. So, watch to see how the VIX reacts at this level."
As it turns out, the low on the VIX yesterday was 12.34 before the VIX recovered to close above 12.50, at 12.64.
Once again, the VIX has bounced at the 12.50 level.
That and that fact that both the 30 minute and 60 minute charts are still in downtrends tell us that a sell off is possible. However, both timeframes are close to crossing into an uptrend.
And price is above the midbands on both timeframes.
The midband on the 30 minute is 2,752 and on the 60 minute it is 2,745.
Even with a projected open 20 points lower this morning, the S & P 500 should still be about 20 points above the midband on the 30 minute chart.
With price trading above the midbands, I would expect support at that level on a pullback.
And price is still well above the support level from last week's weekly price bar, which is in the 2,732 area.
Continue to monitor the longer term levels for the market.
Here are the Key Levels for the Markets:
$VIX:
Major level: 31.25
Minor level: 29.69
Minor level: 26.56
Major level: 25.00
Minor level: 23.44
Minor level: 20.31
Major level: 18.75 <
Minor level: 17.19
Minor level: 14.06 **
Major level: 12.50 <
Minor level: 10.94
The VIX closed at 12.58. It closed .11 points to the downside. The VIX did hit the 12.50 objective and managed to close just above it.
The depth of this pullback should be determined by the extent of the move up in the VIX.
If the VIX can take out 14.84 on this drive, then I would expect it to move higher and thus the markets lower.
On the downside, support should be at 11.72.
$SPX:
Major level: 2,812.50 <
Minor level: 2,802.73
Minor level: 2,783.18 **
Major level: 2,773.40
Minor level: 2,763.65
Minor level: 2,744.15
Major level: 2,734.40
Minor level: 2,724.63
Minor level: 2,705.08
Major level: 2,695.30
Minor level: 2,685.55
Minor level: 2,666.05
Major level: 2,656.30
2,758.80 should be support. Also, watch to see how the S & P 500 reacts around the major 2,773.40 level.
If the S & P 500 cannot hold at the 2,758 level, I would expect support at 2,746.60.
QQQ:
Major level: 181.25 <
Minor level: 179.69
Minor level: 176.56 **
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
The QQQ closed at 177.32. I would expect strong support at the 175 level. And minor support is at 176.56.
The 60 minute chart is bullish and the 30 minute is bearish. From a technical standpoint, support should be around 174.45.
IWM:
Major level: 171.88
Minor level: 171.10
Minor level: 169.53 **
Major level: 168.75 <
Minor level: 167.97
Minor level: 166.41
Major level: 165.63
Minor level: 164.85
Minor level: 163.28
Major level: 162.50
The IWM closed at 168.54. On the downside, 166.41 should offer support.
The 30 minute chart has crossed into an uptrend. Technical support should be around 165.48.
TLT:
Major level: 125.00
Minor level: 124.61
Minor level: 123.83
Major level: 123.44 <
Minor level: 121.49
Minor level: 120.70 **
Major level: 120.31
Minor level: 119.92
Minor level: 119.14
Major level: 118.75
The TLT closed at 121.95. The objective for the TLT should be up to 123.44.
121.88 should be minor support. A break under this level and I would expect the TLT to continue lower.
GLD:
Minor level: 123.05
Minor level: 122.27
Major level: 121.88
Minor level: 121.49
Minor level: 120.70
Major level: 120.31
Minor level: 119.92
Minor level: 119.14 **
Major level: 118.75
Minor level: 118.36 **
Minor level: 117.58
Major level: 117.19
The GLD closed at 118.93. A break under 118.75 and the GLD should head lower.
119.53 should be minor resistance on the upside.
With the daily chart just crossing into a downtrend, look to sell this rally when it fails.
XLE:
Major level: 78.13 <
Minor level: 77.35
Minor level: 75.78 **
Major level: 75.00
Minor level: 74.22
Minor level: 72.66
Major level: 71.88
Minor level: 71.10
Minor level: 69.53
Major level: 68.75
The XLE closed at 77.37. Yesterday's high came within 13 cents of the 78.13 level.
On the downside, 76.17 should be support. A break under this level and the XLE could test 75.
The major 75 level should continue to offer support. 77.34 could offer resistance.
FXY:
Minor level: 88.09
Minor level: 87.70
Major level: 87.50
Minor level: 87.31
Minor level: 86.92
Major level: 86.72 <
Minor level: 86.53 **
Minor level: 86.14
Major level: 85.94
The FXY closed at 86.03. The objective is still down to 85.94. And yesterday, the FXY came within 5 cents of the objective.
86.23 is minor resistance. Support is at 85.74.
AAPL:
Major level: 200.00
Minor level: 198.44
Minor level: 195.31
Major level: 193.75
Minor level: 192.19
Minor level: 189.06 **
Major level: 187.50 <
Minor level: 186.72
Minor level: 185.16
Major level: 184.38
Apple closed at 190.35. Apple should test the 193.75 level.
192.19 is minor resistance. And minor support should be at 188.28. The short term 30 minute has turned bullish.
WATCH LIST:
Bullish Stocks: NFLX, BDX, FLT, FB, VMW, FANG, CNC, DPS, CTSH, NKE, AVAV, LW, APA, ETSY, PFE, SJM
Bearish Stocks: SWK, WBC, NXPI, TSN, WRK, WRK, KMT, LM, BITA, RMBS
Be sure to check earnings release dates.
