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 - $2.63
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
WDC Long July 19th - $52.50 Call @ $1.34
WDC Short July 19th - $55.00 Call @ $0.34
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We were able to recoup about one half the investment in the WDC position. This shows why you don't want to overtrade these short term option positions. You need to be right on the direction and entry and we were a bit early on the entry.
Friday, the S & P 500 closed 18.50 points lower. It ended the week closing at 2,976.61.
So, for the week, the S & P 500 closed 37.16 points lower. And it closed about 12 points under the weekly bar from the prior week, which is bearish.
It also closed at 7.9% of the bar, which does suggest the odds of violating last week's low of 2,973.09 before the high of 3,017.80 is about 90%.
The only bullish scenario from last week was that the range was only 44.71. With a weekly average true range of 70.11 points, the range was only 63% of the average. A sell-off equal to the average or greater would certainly have more bearish implications.
And the low held just above the major 2,968.80 level. As I have said, once a major level is violated, it often acts as support on a retest. And that is what we are seeing right now. So, watch to see if this level holds.
The resistance level from last week's weekly price bar is in the 2,995 to 2,997 area.
Friday's daily bar closed at 2% of the range. So, this suggests that there should be weakness early in the week.
And if the market reverses, it will most likely happen on Tuesday or Wednesday.
The resistance level from Friday's daily bar is in the 2,990 area.
Pre open, the S & P is trading about 7.50 point higher.
This week will get earnings from quite a few market movers.
This incudes CMG, which reports tomorrow afternoon and has the potential to make a big move.
Boeing reports Wednesday before the open. And Wednesday after the close, we get earnings from FB, TSLA and PYPL.
And Thursday after the close we get earnings from AMZN.
As you can see, there are a lot of high profile companies reporting this week.
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 14.34 on Friday. For the day, the VIX was up 0.81.
14.85 could still offer resistance, but if it is taken out, it should head up to 15.63.
At this point, 12.89 should offer support. And 14.84 should continue to be resistance. And the major 12.50 level should be support 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
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
The objective is still up to 3,125. To void this objective, the S & P would need two closes under 2,929.73, which is still 45 points away from the market.
At this point, the major 2,968.80 level should still be support. And there is minor support at 2,976. So, if the minor 2,976 level is taken out, it should test 2,968.80.
Under the major 2,968 level, there is minor support at 2,963.90.
QQQ:
Major level: 196.88
Minor level: 196.10
Minor level: 194.53
Major level: 193.75 <
Minor level: 192.19 **
Minor level: 189.06
Major level: 187.50
Minor level: 185.94
Minor level: 182.81
Major level: 181.25
Minor level: 179.69
The QQQ closed at 191.01. The QQQ closed back under the minor 192.19 level. This now suggests that if the QQQ closes under 192.19 today, it should drop to 187.50.
190.63 is a minor support level. And if it breaks under this level, this would also confirm a drop to 187.50.
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 153.82. A close today under 154.69 and the downside objective should be to 143.75.
Also, the IWM continues to trade around the midband on its daily chart. Friday was the 15th day it traded around the band.
And now Friday, it closed back under it. The midband is now 154.06.
At this point, the IWM has not broken out, nor has it broken down.
It will do one or the other at some point. Not an exciting market until one of these scenarios happen.
154.69 should be resistance.
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 131.69. It will need two closes above 132.03 to head higher.
131.64 and 131.25 should offer support. If this level holds, look for a move up to 132.81.
If the TLT breaks under 131.64, look for it to head lower.
GLD:
Major level: 137.50
Minor level: 136.72
Minor level: 135.16 **
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
The GLD closed at 134.47. It sold off 2.01 to close back under the upper back, which is now 134.76.
I am not inclined not to buy above the upper band because the risk is too high. The question is this ... is it time to short?
To consider a short, you want to at least see a close back under the upper band. But, with the ability to clear the upper band, a market tends to bounce around before a clear move develops.
For example, the GLD has spent the whole month of July trading above and below the upper band.
If you are trading options, this is where your premium melts away. The market has not made a succint move in either direction. In my opionion, the move to the upside is limited based on how extreme the GLD traded, but it could close above the upper band and keep going.
This is similar to the IWM trading around its midband. We know it will ultimately make a move in either direction, but options are just deteriorating until that happens.
132.81 is minor 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 62.76. The upside is still to 65.63. The XLE did reclaim the 62.50 level. It should now be support.
Minor support is at 62.11. If the XLE can clear 62.89, it should move higher.
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 hit a high of 206.50 before selling off to close at 202.59. At this point, 203.13 should be resistance and a move to 200 is the most probably course of action.
If Apple does take out 206.26, it would suggest that Apple should head up to 225. And Friday, it could not.
On the downside, watch to see if Apple breaks under 202.35. If it does, that would confirm a move down to 200.
WATCH LIST:
Bullish Stocks: ULTA, SHOP, AVGO, COST, PANW, MCD, LRCX, OLED, EW, VMW, CLX, ITW, IBM, HSY, KLAC, XLNX, YUM
Bearish Stocks: DPZ, LLY, EA, WTFC, NDC, IBKR, THC, VST, CC, PXD
Be sure to check earnings release dates.
