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
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
Premium Collected - $1.65
BERY Long Sept $50.00 Call at $2.70
OI Long Nov $17 Call for $1.25 OI Short Nov $20 Call for $0.35 VALE Long at $13.50 VALE Short July 27th - 13.50 Call at $0.21 FEYE Long at $16.69 FEYE Short July 27th - $17.00 Call at $0.25
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Yesterday, I suggested another weekly covered call. And this time it was on FEYE. You should have bought FEYE and sold the $17 call that?expires next week.
We were biased for a violation of last week's high before the low and that is what we got yesterday.
The S & P 500 hit a high of 2,814.19 yesterday, taking out last week's high by about 10 points.
We also identified support from last week's weekly price bar in the 2,784 to 2,787 area. And yesterday's low came in at 2,789.24. This was just 2 points above the higher end of the support area.
Learning to read price expectation puts you in a position to craft a scenario as to how the markets should trade. Then if that scenario does not hold true, you know something is changing in the market. Or could be changing.
So, what should we expect for today?
The S & P 500 closed at 81% of the range of the daily price bar. This puts the odds of violating yesterday's high before the low at around 80%.
The support area from yesterday's daily price bar is in the 2,799 to 2,802 area.
So, if the market does pullback to that area, it could be a great area to get long.
Another thing I want to mention is that the market took out the major 2,812.50 level. It breached it slightly, but did not close above it.
I would have preferred a close above it, but I do think that the fact it was breached tells us it should get tested again.
Pre open, the markets are trading about 4 points lower.
Watch the support levels I mentioned above.
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 12.06. Yesterday's high was 13.18 or 10 cents under the 13.28 resistance level I mentioned.
Watch the minor 11.72 support level on the downside. A break under 11.72 and the VIX should head lower.
Which as you know, implies the market continues higher.
SPX:
Major level: 2,841.80
Minor level: 2,829.60
Minor level: 2,805.20 **
Major level: 2,793.00 <
Minor level: 2,780.78
Minor level: 2,756.33
Major level: 2,744.10
Minor level: 2,731.90
Minor level: 2,707.50
Major level: 2,695.30
Minor support should still be at 2,795.40. The 2,812.50 objective was hit yesterday.
On the upside, resistance could come in at 2,819.80.
2,801.50 is also minor support.
QQQ:
Major level: 187.50
Minor level: 185.94
Minor level: 182.81
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
The QQQ closed at 180.27. The QQQ is within 60 cents of the 181.25 level, which is still the objective.
Like the S & P 500, both short term charts are still bullish.
178.91 is minor support. And 179.69 should now be minor support/
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 167.51. The IWM has now had two closes under 167.97, which implies a drop to 165.63. And I would expect support at that level.
Minor support is at 166.41.
Both short term charts are on uptrends, so look to buy on support.
The IWM needs to clear 168.75 to move higher.
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 121.98. The TLT is trading just above the midband on the daily chart, which is 121.26.
121.88 should offer major support.
GLD:
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
Minor level: 116.80
Minor level: 116.02
Major level: 115.63 **
The GLD closed at 116.28. The GLD took out the 117.19 objective.
115.63 should offer strong support. A break under this level and the GLD continues lower.
I also need to mention that the GLD is almost at the lower band on the daily chart. That price level is 115.82, which right around the key 115.63 level.
In other words, the GLD is oversold.
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 75.08, on cent above the major 75.00 support level.
The XLE has now consolidated between the major 75 and 78.13 levels for about 3 months.
The 60 minute chart just crossed into an uptrend, so short term momentum is shifting to the bullside.
74.22 is minor support.
FXY:
Major level: 86.72
Minor level: 86.53
Minor level: 86.14
Major level: 85.94
Minor level: 85.75
Minor level: 85.36
Major level: 85.16 <<
Minor level: 84.97 **
Minor level: 84.58
Major level: 84.38
The FXY closed at 84.79. The FXY broke under the major 85.16 level.
A close today under 84.97 and the FXY should drop to 84.38.
The FXY is oversold. Consider an unequal straddle or strangle with a bullish bias. Email me if you don't understand the strategy.
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 191.45. 190.63 and 189.06 should be minor support.
The objective for Apple is to the 193.75 level.
WATCH LIST:
Bullish Stocks: AMZN, GOOGL, HUN, ILMN, SPY, BIDU, BDX, FLT, PANW, FB, MA, SAGE, AMGN, ACN, CXO, WDAY, LOPE, DGX
Bearish Stocks: AVGO, MCD, AMP, KSU, MAN, BG, TSN, AMAT, MET
Be sure to check earnings release dates.