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
DYN Long at $12.55
Premium Collected $0.48
APA Long Oct $47.50 Call at $3.45
APA Short Oct $52.50 Call at $1.10
SBH Long at $19.20
SBH Short July $20 Call at $0.30
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After Monday's narrow range, inside day, it appeared the S & P 500 was set to pullback. The day began with a bearish down gap and sold off to a low of 2,450.34, before finding support.
The low was about 3 points below the 2,453.12 upside confirming line.
After recovering, the S & P 500 closed the day at 2,460.61, up a modest 1.47 points for the day.
But I think the key here is that once again, the odds favor trading the long side of the market. This is now especially true now that the short term 30 minute chart has moved into an uptrend. The 60 minute chart is now very close to joining the 30 minute chart. In fact, both the 200 ema and the 253 day average on the 60 minute chart read 2,433.39.
If the 60 minute can move into an uptrend, that will certainly help to confirm that the 2,500 objective should be achieved.
As the S & P 500 was gappping down at the open, the VIX was doing the opposite. It gapped up and moved up in the morning.
The VIX opened at 10.23, above the 9.77 level I mentioned yesterday. From there it ran up to a high of 10.35.
In yesterday's update, I mentioned to look for resistance at 10.55 and the high fell 20 cents short of that level. We also had resistance at the minor 10.15 level. What is interesting about the two resistance levels is that the midpoint of 10.15 and 10.55 measures exactly 10.35, which just happens to be the high for the day.
Though this phenomenon is not that uncommon, the key is that you should have been looking for higher levels to offer resistance. And they did.
The S & P 500 is now within 40 points of the objective, but yesterday did result in a divergence.
A divergence due to the fact that both the S & P 500 and the VIX closed to the upside.
This usually foretells that a change in direction is forthcoming, even if it is a short term move.
If the 60 minute chart can cross into an uptrend and the market has a one or two day pullback, it would be a great chance to buy the market for the move up to 2,500.
NFLX ended the day closing up $21.90 or 13.54% off their earnings. And GS was off $5.95 or 2.6% off their earnings.
The largest move off earnings yesterday was on TTS. If dropped $5.25 or 25.93%.
I suspect we will see many double digit moves this earnings season.
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
The VIX closed at 9.89. 10.16 should be minor resistance. And the VIX is within
61 cents of the major 9.38 support level.
I would expect a test of 9.38. If it holds, we could see a pullback.
9.38 is a key level for the VIX. Watch to see if it holds.
$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
Yesterday's high was 2,460.92, just 2 cents above the minor 2,460.90 minor level I mentioned yesterday.
Minor resistance is at 2,468.80. 2,354.12 should still offer support.
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 continues to inch up to its 143.75 objective. It closed at 143.14, within 61 cents of the level.
143.36 is minor resistance.
Minor support is at 142.19 and 142.38.
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
143.75 should still be the objective. The IWM closed at 141.69, just above the minor 141.41 minor level. 141.41 should still offer support.
142.97 could offer resistance.
TLT:
Major level: 125.00 <<
Minor level: 124.61
Minor level: 123.83
Major level: 123.44
Minor level: 123.03
Minor level: 122.21
Major level: 121.88
The TLT came within 25 cents of the 125 objective. I still expect resistance at 125.
125.39 is minor resistance. And 14.41 is minor support.
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 at 118.11. It continues to inch up to the 118.85 objective.
117.97 should offer minor support and 120.31 should be resistance.
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
Yesterday's high was 4 cents above the 65.63. After dropping under the level, the XLE sold off to a low of 64.74.
The XLE did close above 64.85, at 65.01. It would need two closes under 64.85 to drop to 62.50.
To move up to the next level, the XLE needs two closes above 66.41.
64.45 should offer support. And resistance is at 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 hit the 85.94 objective we were looking for. To move up to 87.50, the FXY would need two closes above 86.33. Watch to see if the FXY drops under 85.94.
86.33 is minor resistance. And 85.55 should be minor support.
AAPL:
Major levels for Apple are 153.13, 150, 146.88 143.75, and 140.63.
Apple continues to hold at the 150 objective. Two closes above 150.78 and Apple should move up to 153.13.
149.22 is short term support.
Short term momentum is shifting to the upside.
WATCH LIST:
Bullish Stocks: PCLN, LMT, NOC, HUM, GS< FDX, BDX, BA, STZ, AMGN, RTN, LLL, RTN, CMI, FB, AET, RHT, WDC, SMG, KSU, AXP, DD
Bearish Stocks: JACK, PAYX, ROST, SIMO, EAT, BGS, RBA, SCG
Be sure to check earnings release dates.
