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
SNAP Long at $14.54
Total Premium Collected - $2.85
Short July 19th - $15.50 call @ $0.48
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 $0.80
QCOM Long July 19th - $75.00 Call @ $0.95
QCOM Short July 19th - $78.00 Call @ $0.24
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We start out the week with two open positions and both expire this Friday. The first is the short call on SNAP and the second is the debit spread on QCOM.
I will send separate emails if I suggest you close out the positions.
This historic bull market keeps moving higher. Friday ended up with the first close above 3,000.
The week closed out at 3,013.77. For the day, the S & P closed 13.86 points higher.
Friday/s close was also significant because it was the first closed above the minor 3,007.85 level. This now suggests that if the S & P can close above 3,007.85 today, the upside objective should be to the major 3,125 level.
In Friday's update, I mentioned the possible scenarios around the minor 3,007.85 level and as it turned out, the S & P finally took it out and managed to close above it.
We should know today if the next objective is to 3,125. And what also makes this level significant is that the upper band on the daily chart is 3,109.30. We have two key price levels around the same price.
The daily bar closed Friday at 99% of the daily bar, so we expect follow through today. And with the S & P trading about 5 points higher pre open, the market should open above Fridays high of 3,013.92.
This would suggest that the high would offer support on a pullback.
For the week, the S & P closed 23.36 points higher. And the weekly bar closed at 99.7% of the range of the bar. This of course suggests the high will be violated before low and it should right at the open.
The support area from the weekly bar is in the 2,989 to 2,996 area.
I suspect the only bearish comment I can make about Friday is that the range contracted. Friday's daily range was only 12.05 points, which was just over one half the daily average true range of 23.22.
And the weekly bar contracted as well. The range for the week was only 50.48 points, which was less than the 72 point weekly average true range.
These contractions do imply that we will see an expansion. And at this point, I am more inclined to suggest we will see a melt up than a sell off.
The other major factor that we need to monitor is that the fact that the VIX closed under the 12.50 level. This puts us on warning that a spike could happen and the market should experience some profit taking.
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
The VIX closed at 12.39 on Friday. This was the first close under 12.50 in a long time. The next minor level to the downside is 11.72.
If the VIX does close for two days under that level, it should test 9.38.
Dropping to 9.38 would certainly caution us that profit taking should come in.
12.89 should be minor resistance. And 12.50 as well.
SPX:
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 << HIT
Minor level: 2,929.73
Minor level: 2,851.58
Major level: 2,812.50
Minor level: 2,773.45
Minor level: 2,695.35
Major level: 2,656.30
As I said above, a close today above 3,007.85 and the S & P should move up to 3,125.
The minor 3,002.90 level should now be support.
On the upside, there is minor resistance at 3,027.30.
There is a minor support level at 3,010.23 and if the S & P closes above that level today, it should move up to 3,046.90.
QQQ:
Major level: 193.75
Minor level: 192.19
Minor level: 189.06 **
Major level: 187.50 < Hit
Minor level: 185.94 **
Minor level: 182.81
Major level: 181.25
Minor level: 179.69
Minor level: 176.56
Major level: 175.00
The QQQ closed at 193.53. The high came to within 21 cents of the 193.75 target.
Pre open, the QQQ is trading about 27 cents higher, so the target should be cleared at the open.
If the QQQ does clear 193.75, it would be a strong indication that it will head higher.
192.19 should offer support.
IWM:
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
Minor level: 148.44
Minor level: 145.31
Major level: 143.75
The IWM closed at 156.11. The IWM will still need two closes above 157.81 to confirm a move up to 162.50. But, the IWM has to clear 156.25 first. And it is now only 14 cents under the major 156.25 level.
At this point, the IWM continues to hold the midband, which is 154.27.
Short term trends remain bullish. So, buying against support is the best strategy.
Technical support is at 155.50.
TLT:
Major level: 134.38
Minor level: 133.60
Minor level: 132.03
Major level: 131.25
Minor level: 130.47 **
Minor level: 128.91
Major level: 128.13
Minor level: 127.74
Minor level: 126.95
Major level: 126.56
Minor level: 126.17
Minor level: 125.39
Major level: 125.00
The TLT closed at 130.22 on Friday. A close today under 130.47 and the TLT should drop to 128.13.
131.25 is a minor resistance level now, as well as 130.47.
To move higher, the TLT will at least have to reclaim the minor 130.47 level.
GLD:
Major level: 134.48
Minor level: 133.60 **
Minor level: 132.03
Major level: 131.25
Minor level: 130.47
Minor level: 128.91
Major level: 128.13
Minor level: 127.74
Minor level: 126.95
Major level: 126.56
Minor level: 126.17
Minor level: 125.39
Major level: 125.00
Minor level: 124.22
Minor level: 122.66
The GLD closed at 133.53. Watch the upper band, which is now 133.51. The GLD is back to the upper band.
132.81 is a minor level and now that the GLD is above it, it should offer support.
131.25 should offer strong support.
132.50 is technical support.
XLE:
Major level: 65.63 <
Minor level: 64.85
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
The XLE closed at 64.44. The upside is still to 65.63.
63.28 should be support. And minor support is at 63.67.
64.84 is a minor resistance level. So, if it can clear 64.84, it should move up to 65.63.
63.50 is technical support.
Short term charts remain bullish.
AAPL:
Major level: 212.50
Minor level: 209.38
Minor level: 203.13 **
Major level: 200.00 <
Minor level: 196.88
Minor level: 190.63
Major level: 187.50
Minor level: 184.38
Minor level: 178.13
Major level: 175.00
Apple closed at 203.30. A close today above 203.13 implies a move up to 212.50.
206.25 could offer some resistance, so if Apple clears this level, expect it to move higher.
200 should be support. Apple did break under the technical support at 202.50.
Short term charts remain bullish.
WATCH LIST:
Bullish Stocks: NFLX, LMT, ADBE, FLT, MA, COST, APD, MLM, VRSN, MCD, HD, FB, OLED, HON, V, BABA, DIS, MSFT, WYNN
Bearish Stocks: RTN, USNA, SPR, KEX, NUS, DIS, TUP
Be sure to check earnings release dates.