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.
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The market reversed and closed higher on the day. The S & P 500 closed at 3,169.94, closing 24.62 points higher on the day.
This brought the S & P 500 back above the minor 3,164 level. This was a critical price level because had the market closed under it yesterday, it would have been the second close under the minor level.
The implication of that would have been further profit taking for the market.
As I discussed yesterday, the confirmation for a push higher in the S & P would be a reversal to the downside in the VIX.
I mentioned yesterday where resistance on the VIX should come in. In fact, this is what I wrote:
"As to the first question, there are a few points of resistance. From a technical standoint, there is resistance at around 30.50, which is the midband on the 60 minute chart."
As it turned out, the high yesterday on the VIX was 30.20, or 30 cents under the midband on the 60 minute chart.
When the VIX broke is when the S & P began to move higher.
The range for the day was only 35.27 points. This was 61% of the daily average true range, which is now 58.13 points.
And the daily bar closed at 95% of the range of the daily bar.
This suggests that yesterday's high of 3,171.80 should be violated before the low of 3,136.53.
The support area from yesterday's daily bar should be in the 3,154 area. Above that level, there is support around 3,161.
Pre open, the S & P is trading about 2 points higher.
Watch the VIX again today. The midband on the daily chart is 24.11 and the VIX is still above it. Until it is violated, it should be support.
Here are the Key Levels for the Markets:
$VIX:
Major level: 37.50
Minor level: 36.72
Minor level: 35.16
Major level: 34.38
Minor level: 33.60
Minor level: 32.03
Major level: 31.25
Minor level: 30.47
Minor level: 28.91 **
Major level: 28.13 <
Minor level: 27.35
Minor level: 25.78
Major level: 25.00
Minor level: 24.22
The VIX closed at 28.08. It closed 1.35 lower on the day. This put the VIX back under the major 28.13 level.
This suggests that the minor 28.91 level should still be resistance. And two closes under 27.35 and the VIX should drop to 25.
Technical resistance is at 29. The 60 minue chart is still bullish, but is close to crossing into a downtrend. If the 60 minute does cross into a downtrend, it would suggest the market will continue higher.
S & P 500:
Major level: 3,281.20
Minor level: 3,242.15
Minor level: 3,164.00 **
Major level: 3,125.00 < Hit
Minor level: 3,085.95
Minor level: 3,007.85
Major level: 2,968.80
Minor level: 2,929.75
Minor level: 2,851.65
Major level: 2,812.50
Minor level: 2,773.45
Minor level: 2,695.35
Major level: 2,656.30
The S & P closed at 3,169.94. I mentioned that the with the 6% close percentage on Tuesday, that the low from Tuesday should be violated before the high.
And that is what happened. Wednesday's low of 3,136.53 took out the prior day low by 6.40 points.
And then the market reversed to close above the 3,164 level I mentioned.
At this point, the 3,164 level should be support.
Technical support is around 3,145.
QQQ:
Major level: 262.50
Minor level: 260.93
Minor level: 257.80 **
Major level: 256.25 <
Minor level: 254.69
Minor level: 251.56
Major level: 250.00
Minor level: 248.54
Minor level: 245.31
Major level: 243.75
Minor level: 242.15
Minor level: 239.00
Major level: 237.50
The QQQ closed at 259.99. A close today above 257.80 and the QQQ should test 262.50.
The 257.80 level should be support.
The QQQ will need to reclaim the 257.80 level to head higher.
Technical support is around 258. The QQQ did clear the upper band on the daily chart. The upper band is 257.75 and the QQQ closed above it. This level should now be support.
IWM:
Major level: 156.25
Minor level: 154.70
Minor level: 151.56
Major level: 150.00
Minor level: 148.44
Minor level: 145.31
Major level: 143.75 < Hit
Minor level: 142.19 **
Minor level: 139.06
Major level: 137.50
Minor level: 135.94
Minor level: 132.81
Major level: 131.25
The IWM closed at 141.94. At this point, we know there is resistance at the midband, which id 146.30.
And the minor 142.19 level should also be resistance. The IWM needs to clear this level to head higher.
Technical support is around 141. Watch to see if the IWM holds this level. If it can't, it should drop. This level has held. Look for a push higher.
TLT:
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
Minor level: 161.72
Minor level: 160.16
Major level: 159.38
Minor level: 158.60
Minor level: 157.03
Major level: 156.25
Minor level: 155.47
The TLT closed at 164.55. The TLT is just under the 165.63 objective.
With a close under 164.85 today, the TLT should drop to 162.50.
165.63 should now be resistance.
Support is still around 162, which is the midband on the 60 minute chart.
GLD:
Major level: 171.89
Minor level: 171.11
Minor level: 169.54 **
Major level: 168.75 < HIT
Minor level: 167.98
Minor level: 166.41
Major level: 165.63
Minor level: 164.85
Minor level: 163.28
Major level: 162.50
Minor level: 161.72
Minor level: 160.16
The GLD closed at 170.09. The GLD took out the 168.75 objective. And has now closed above 169.54. It needs to hold this level today to head higher.
The minor 167.98 level should be support.
Technical support should be at 169.
XLE:
Minor level: 47.65
Major level: 46.88
Minor level: 46.09
Minor level: 44.53
Major level: 43.75
Minor level: 42.97
Minor level: 41.41
Major level: 40.63
Minor level: 39.83
Minor level: 38.28
Major level: 37.50 <
Minor level: 36.72 **
Minor level: 35.15
Major level: 34.27
The XLE closed at 36.23 The XLE needs to clear the minor 36.72 level to head higher. Biased for a drop to 34, but if the XLE can clear 36.72, it should make a push higher. So, watch this level today.
To move higher, the XLE will need two closes above 38.28.
The midband on the 60 minute chart is now 39 and the XLE is below it. This should now be resistance. This level is 39 and the XLE will need to clear it to head higher.
The 36 area should be technical support.
AAPL:
Major level: 387.50
Minor level: 384.38
Minor level: 378.13 **
Major level: 375.00 < Hit
Minor level: 371.88
Minor level: 365.63
Major level: 362.50
Minor level: 359.38
Minor level: 353.13
Major level: 350.00
Minor level: 346.88
Minor level: 340.63
Major level: 337.50
Apple closed at 381.37. Apple closed 8.68 higher for the day.
With a close today above 278.13, Apple should head up to 387.50.
Technical support is around 377.
WATCH LIST:
Bullish Stocks: AMZN, TSLA, SHOP, REGN, NFLX, ADBE, NOW, NVDA, ASML, ILMN, AAPL, LRCX, AMGN, WIX, VEEV, WST
Bearish Stocks: BYND, PNC, MMS, COF, CLUE, RAMP, AMBA, XOM, ADS, FTDR, FANG, DIN, AJRD, FUN, HFC