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
FEYE Long at $16.69
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VALE settled Friday almost $1 above the $13.50 strike, so you no doubt were assigned Friday on the short $13.50 calls.
The return ended up being 5.06% for two weeks.
FEYE ended Friday settling under the $17 strike, so the call options expired worthless and you keep your shares. I will look to sell more calls this week.
The week ended with profit taking hitting all major markets. The NASD got hit harder than the S & P 500 and the DOW. The NASD Composite was down 1.46% as compared to the S & P 500, which was down .66%.
A lot of the high flying NASD stocks are experiencing sell offs. This of course, includes Facebook, which reported last week and was down $41.24 off their earnings.
By the way, if you are asking if now is the time to get back into Facebook, my answer is simple. No.
And here is why.
As I mentioned last week, Facebook was trading above its upper band just before earnings and as you know, this indicates that the stock was severely overbought.
After earnings, Facebook closed just under the midband, which is $179.14. In fact, Friday's high was $179.93 before closing under the midband.
To consider buying the stock, I would wait to see if it can close above the midband. If it can't, it is possible Facebook could drop to the lower band, which is $148.69.
In other words, Facebook has potentially another $30 before it could bottom.
Another high flying stock has been Google, which gapped up off their earnings. If continued to run up a bit after earnings but it ran above the upper band on its daily chart. Friday, it sold off $32.61 to close under the lower band.
Once again, this demonstrates that you really do not want to initiate long positions above the upper band.
Even with the sell off on Friday, the S & P 500 closed 16.99 points higher for the week. But, it closed under the midpoint, which can be bearish.
The resistance levels from last week's weekly price bar is in the 2,809 to 2,821 area.
And Friday, the S & P 500 closed 18.62 points to the downside. For the day, the market closed at 30% of the daily price bar, which puts the odds of the low being violated before the high at around 70%.
The resistance level from Friday's daily bar is in the 2,825 to 2,830 area.
I do need to point out that the 30 and 60 minute charts for the S & P 500 are still bullish. This tells us the market should rally again once support comes into the market.
Earnings continue this week, with BIDU reporting tomorrow after the close.
Pre open, the S & P 500 is trading about one point higher. I am looking for a violation of Friday's low before the market heads higher.
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 13.03. It closed back above the 12.50 level. However, to move higher, the VIX will need two closes above 14.06.
12.50 should now be support. Watch the minor 12.89 level. If the VIX cannot clear 12.89, I would expect resistance there.
SPX:
Major level: 2,890.60
Minor level: 2,878.40
Minor level: 2,854.00
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
The S & P 500 had its first close under 2,829.60. A close today under 2,829.60 indicates that the S & P 500 should drop to 2,793.
Watch the minor 2,822.30 level. If the S & P can clear this level, I would expect support there.
Also, look for support at 2,797.90.
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 177.62. Minor support should be at 175.56.
If the QQQ cannot hold 175.56, it should drop to 175.
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 165.26. Short term support is at 164.84. If this level holds, I would expect the IWM to get back above 168.75.
If it can't I would be looking for a drop to 162.50.
The IWM broke under the midband on the 30 minute chart. The lower band is 162.13, which is close to the major 162.50 level.
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 119.46. The TLT is inching down the 118.75 objective.
A break under 119.34 and that should confirm a drop to 118.75.
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 115.83. By failing to close above 116.02, the GLD will now need two closes above that level to move higher.
A break under the 115.63 level and the GLD should continue lower. 115.63 is a major level for the GLD.
On the upside, 116.41 should be minor 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 76.63, above the minor 75.78 level for the second day. This now implies that the XLE should move up to 78.13.
Support should be at 76.17. And minor resistance is at 77.34.
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 86.20. At this point, 86.52 should be resistance.
86.13 should now be a minor support level.
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 190.98. Look for a move to 187.50.
189.06 is a minor support level. If 189.06 is taken out, look for Apple to head lower.
The 30 and 60 minute charts are bullish. This implies a bounce should happen.
WATCH LIST:
Bullish Stocks: AMZN, GOOGL, ORLY, SPY, DIA, FLT, COST, AMGN, AET,
CXO, GRUB, EOG, UHS, BDX
Bearish Stocks: TSLA, ITW, WHR, SWKS, NXPI, JACK, LAD, SMG, WDC, SEIC, PZZA, WGO
Be sure to check earnings release dates.