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
7/20 - Short 7/24 - $20 Call @ $0.25 - Expired Friday
7/20 - Long 7/24 $19 Put @ $0.20 - Sold @ $0.35
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Today's Working Orders
No working orders.
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You should have been filled on the $19 put at $.35 on Friday.? Between, the put position and the calls sold, you should have collected $.70 per share, bringing the break even down to $19.23.
Look for an adjustment this week.
Since stopping at the 2,132.82 resistance line, the S & P 500 has had 4 consecutive bearish closes.
Furthermore, there has not been any evidence of a selling climax during this sell off.
And once again, the VIX held support at the 12.50 level.
This is starting to feel like it maybe more than just a pullback.
Sentiment indicators, like the Bullish % Index are making new lows.
Here are the key levels for the markets.
Stocks...
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VIX: ?
Major level - 17.19
Major level - 15.63
Major level - 14.06
Minor level - 12.89
Major level - 12.50
Friday, the VIX closed at 13.74, so a close today above 12.89 and the objective is 14.06.
For a trend change to occur in the markets, I would expect the VIX to exceed 17.19.? In other words, the VIX could move up to 17.19 and an uptrend in the markets would still be effect.
S & P 500 Cash Index: ?
Major level - 2,156.30
Minor level - 2,132.82
Major level - 2,125.00
Major level - 2,093.80
Minor level - 2,085.98
Minor level - 2,070.32
Major level - 2,062.50
Friday, the S & P 500 closed at 2,079.65.? If the S & P closes today under 2,085.98, the objective is to 2,062.50.
The shorter term 60 minute chart is still in an uptrend and is oversold.
A drop to the 2,062 level would not affect the bull trend status.
However, I would feel differently if the S & P 500 dropped to 2,030 on this drive.
You want to see the VIX reverse to the downside and the S & P 500 hold support at one the levels as a clue to initiate long positions.
Nasd 100 (QQQ):?
Major level - 115.63
Minor level - 113.28
Major level - 112.50
Minor level - 110.16 - 2 closes under & objective is 109.38
Major level - 109.38 - Should be support.
Minor level - 107.03
Major level - 106.25
Friday the QQQ closed at 111.10, just above the 110.16 level.? The QQQ would still need two closes under 110.16 to drop to 109.38.
TLT: ?
Minor level - 122.66
Major level - 121.88
Minor level - 119.53
Major level - 118.75
Minor level - 117.96
Minor level - 116.41
Major level - 115.63
Friday, the TLT hit a high of 121.55, just .33 short of the 121.88 objective.
GLD:
Major level - 112.50
Major level - 109.38
Minor level - 107.03
Major level - 106.25
Minor level - 105.46
Major level - 103.13
Friday, the GLD hit a low of 103.43 and had a bounce.
We should know in a few days if the 103.13 level will act as support.? If it can't, I expect a drop to 100.
XLE:
Major level -? 75
Minor level - 74.21
Minor level - 72.66
Major level - 71.88
Minor level - 71.09
Major level - 68.75
Major level - 65.63
Sell any rallies at this point.
The XLE had two closes under the 71.88 level.
I expect a drop down to around 62 to 65.
Watch list:
Bullish Stocks:? AMZN, PANW, ULTA, EW, MNST, NKE, FB, UA, SPLK, V, SBUX, GIS
Bearish Stocks: IBM, CMI, DDS, CVX, Z, CAT, EOG, DECK, XLE, LNG