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
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BERY Long Sept $50.00 Call at $2.70
CB Long Nov $125 Call for $6.40
CB Short Nov $135 Call for $3.00
OI Long Nov $17 Call for $1.25
OI Short Nov $20 Call for $0.35
BAC Long Nov $28 Call for $1.78
BAC Short Nov $31 Call for $0.62
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Yesterday you should have added a long term debit spread on BAC, if you followed the alert. Risk was limited to under 1% of the portfolio.
The markets have an early closing today because of the holiday tomorrow. The markets close today at 1:00 EST.
And they are closed tomorrow because of the July 4th Holiday here in the States. Enjoy your 4th!
Yesterday saw the S & P 500 open on a large bearish gap. The market opened 13.42 points lower than Friday.
From there the market dropped to a low of 2,698.95. This was a drop of almost 20 points from the close on Friday.
After stalling at the low, the S & P 500 proceeded to rally all day and closed higher. It ended up closing at 2,726.71. For the day, it was up 8.34 points.
And for the day, the range expanded. The daily range was 28.31 points, compared with the average daily range of 26.03 points.
The daily price bar also closed at 98% of the daily bar.
All this points to the supposition that we would expect the high from yesterday to be violated before the low.
And quite frankly, that should certainly be the situation do to the fact that the S & P 500 is trading about 12 points higher before the open.
So, support from yesterday's daily bar should be in the 2,713 to 2,715 area.
There is still resistance in 2,730 to 2,732 area from last week's weekly price bar.
I do need to mention a simple fact and one you have heard me mention before.
And that is the concept that in a bull market, the pullback usually does not exceed a two level drop.
The S & P 500 stalled at the 2,773.40 level. It actually at the next upside confirming level above 2,773.40, which is 2,783.18.
This is also not unusual after taking out a major level.
But I digress.
Based on a top at the 2,773.40 level, we would not expect this recent pullback to exceed the 2,695.30 level.
Here is where it gets interesting.
The pivot low on June 28th came in at 2,691.99. And yesterday's low was 2,698.95.
If you take the average of these two pivots, you get 2,695.47, which just happens to be within 17 cents of our support line.
Coincidence?
I'll let you decide.
This is not the first time I have shown this type of price action.
Enjoy your 4th!
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 15.61. For the day, it was down .48 or 2.98%.
The VIX got as high as 17.98 before dropping. This was under the 18.75 level which we expected to be resistance.
At this point, 15.63 should now be resistance. And a close today under 17.19 and the VIX should drop to 12.50 again.
$SPX:
Major level: 2,812.50 <
Minor level: 2,802.73
Minor level: 2,783.18
Major level: 2,773.40
Minor level: 2,763.65
Minor level: 2,744.15
Major level: 2,734.40 <
Minor level: 2,724.63
Minor level: 2,705.08
Major level: 2,695.30
Minor level: 2,685.55
Minor level: 2,666.05
Major level: 2,656.30
The market is almost back to the 2,734.40 level. The next level on the upside is 2,744.15.
Two closes above 2,744.15 and the S & P 500 should test 2,773.40.
2,714.80 should be minor support. And 2,751 could offer resistance.
QQQ:
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
Minor level: 167.19
Minor level: 164.06
Major level: 162.50
The QQQ closed at 172.80. The objective should be up to 175.
171.88 should now be support. And 170.31 should as well.
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 164.90. The 162.50 level looks to be holding as support, as expected.
The IWM is almost back to the 165.63 level. Watch to see if it clears this level.
If it can take out 165.63, I would expect a move up to 168.75.
TLT:
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
Minor level: 118.36
Minor level: 117.58
Major level: 117.19
The TLT closed at 121.35. The TLT is trying to hold the midband, which is now 121.19. This level should still be support, until it breaks under it.
121.09 is minor support.
GLD:
Minor level: 123.05
Minor level: 122.27
Major level: 121.88
Minor level: 121.49
Minor level: 120.70
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
The GLD closed at 117.46. The GLD is oversold. Watch the 117.19 level. A break under this level and the GLD should continue lower.
115.63 should be a support level. 119.53 should now be resistance.
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 74.82. The XLE will still need two closes above 75.78 to move higher.
On the downside, two closes under 74.22 and the XLE should drop to 71.88.
Minor support is at 74.61. And the XLE needs to clear 75.39 to head higher.
FXY:
Minor level: 88.09
Minor level: 87.70
Major level: 87.50
Minor level: 87.31
Minor level: 86.92
Major level: 86.72 <
Minor level: 86.53 **
Minor level: 86.14
Major level: 85.94
The FXY closed at 86.35. The objective is still down to 85.94.
The midband should still be resistance. The midband is 87.
86.52 is resistance.
AAPL:
Minor level: 188.28
Major level: 187.50 <
Minor level: 186.72
Minor level: 185.16
Major level: 184.38
Minor level: 183.60
Minor level: 182.03
Major level: 181.25
Minor level: 179.69
Minor level: 176.56
Major level: 175.00
Apple closed at 187.18. Apple came within 20 cents of the 187.50 level. If Apple clears this level, I would expect it to continue higher.
185.94 is minor support. And 189.06 is minor resistance.
And 188.50 is minor resistance.
WATCH LIST:
Bullish Stocks: BDX, SBAC, CTSH, NTAP, APC, EGN, AVAV, K, DRQ, APA, CRC, MDU, CIEN, TEVA, UNT, CNX
Bearish Stocks: GD, GS, LRCX, ITW, CMI, WBC, UPS, LOGM, SWKS, SINA, WDC, XLNX, AAL
Be sure to check earnings release dates.