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
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SNAP Long at $14.54
Premium Collected - $1.65
BERY Long Sept $50.00 Call at $2.70
BERY Long Sept $47.50 Put at $1.50
APA Long July $40.00 call @ $2.10
APA Long July $40.00 put @ $1.90
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Yesterday closed out the month of May with a sell off 18.74 points. The S & P 500 closed at 2,705.27.
This is back under the minor 2,714.88 level, which suggest that if the market closed under that level today, it should drop to 2,656.30. I do believe the market recaptures the 2,714.88 level today.
The sell off yesterday was not that shocking due to the fact that the VIX spiked above the upper band on its 30 minute chart when it ran to the 18.75 level on Tuesday.
This suggests that the VIX should retest the upper band. And as the VIX climbed, the market should pullback.
I mentioned the formation of the May monthly price bar yesterday. As it turned out, with a close of 2,705.27, the price bar closed at the 75% level of the monthly price bar. With a bullish price bar, we would expect support at the 50% level, which is 2,668.43. The 61.8% level, which is 2,685.85 should also offer support.
The low for May was 2,594.62, which was just a few points under the upper band. The upper band is now 2,596.90. With the market staying above the upper band, the bias is still to the upside.
Pre open, the S & P 500 is trading about 12 points higher. This projects an open at around 2,717.
Support from yesterday's daily price bar is in the 2,711 to 2,713 area. And the midpoint from Wednesday, which is 2,715.89, should also be relevant today.
Finally, if you scale out to the weekly chart, we see that the week opened at 2,705.11 and closed yesterday at 2,705.27. So, essentially, the market made no headway this week.
And the range for the week so far, is 28.66. The midpoint is 2,715, which is right around where the market should open today. The high for the week is 2,729.34. Watch this level as well.
The weekly average true range is 71.60. This tells us that the range for the week has contracted 40%. And a contraction is usually followed by an expansion.
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 15.44 yesterday. Yesterday was the second close under 17.19, which does suggest that the VIX should retest 12.50.
15.63 should offer resistance. And a break under 14.84 would suggest a further drop. And on the upside, I would expect resistance at 16.41.
$SPX:
Major level: 2,812.50
Minor level: 2,792.98
Minor level: 2,753.93
Major level: 2,734.40 <
Minor level: 2,714.88 **
Minor level: 2,675.83
Major level: 2,656.30
Minor level: 2,636.75
Minor level: 2,597.65
Major level: 2,578.10
Minor level: 2,558.58
You have the price bar support levels listed above. The 2,702.60 level should offer support. And watch the 2,714.88 level. Reclaiming this level today voids the bearish scenario.
A move up to 2,739 could happen if the S & P takes out 2,727.10.
QQQ:
Major level: 175.00 <
Minor level: 171.88
Minor level: 165.63 **
Major level: 162.50
Minor level: 159.38
Minor level: 153.13
Major level: 150.00
Minor level: 146.88
Minor level: 140.63
Major level: 137.50
The QQQ closed at 170.07. 169.53 should now offer minor support. If the QQQ clears 170.31, look for it to head higher. Yesterday's low was 169.63, so the 169.53 level this be support.
Like the S & P 500, the 30 minute and 60 minute charts remain bullish. Still stronger than the S & P 500 index.
IWM:
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 IWM surged to close at 162.77. The IWM now needs two closes above 163.28 to move up to 165.63.
162.50 should offer strong support. And 163.28 is a short term support 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
Minor level: 118.36
The TLT closed at 121.22. I would expect a drop to 120.31.
The TLT continues to trade around the midband. The midband is 121.95 and the high yesterday was 121.98. This level should be resistance. If it is violated it becomes support.
121.48 is a minor resistance level.
GLD:
Major level: 128.13
Minor level: 127.35
Minor level: 125.78
Major level: 125.00
Minor level: 124.61
Minor level: 123.83 **
Major level: 123.44 <
Minor level: 123.05
Minor level: 122.27
Major level: 121.88
Minor level: 121.49
Minor level: 120.70
Major level: 120.31
The GLD closed 123.10, closing just under the major 123.44 level again. 125 should offer strong resistance on the upside.
Like the TLT, the GLD is trading right around the midband. The midband is 123.03.
It will either break out or break down from here.
I am biased for a breakdown, but a straddle or strangle would still be the low risk trade here.
XLE:
Major level: 81.25 <<<
Minor level: 80.47
Minor level: 78.91
Major level: 78.13 <
Minor level: 77.35
Minor level: 75.78 **
Major level: 75.00
Minor level: 74.22
Minor level: 72.66
The XLE surged and closed at 76.02 yesterday. It had a bullish three close reversal.
Look for a move up to 78.13.
The 76 area is a strong support level. Biased for a move higher.
FXY:
Major level: 89.06
Minor level: 88.87
Minor level: 88.48
Major level: 88.28
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
The FXY closed at 88.03. Biased for a move back to 87.50.
88.09 is minor resistance.
AAPL:
Major level: 190.63
Minor level: 189.85
Minor level: 188.28 **
Major level: 187.50
Minor level: 186.72
Minor level: 185.16
Major level: 184.38
Apple closed at 186.87. Apples is still holding the 187.50 level. A straddle or strangle would be the trade right here. Either it breaks above 187.50 or breaks down.
Both short term charts, the 30 & 60 minute remain bullish.
WATCH LIST:
Bullish Stocks: GOOGL, BA, NFLX, FDX, NVDA, PANW, LRCX, BABA, MA, AAPL, AET, FFIV, DE, ACN, CAT, ATHN, V, UTX, MON, KLAC, CRM
Bearish Stocks: TSLA, NTES, AMT, LOGM, CASY, BCO, CAH, MDP, RRGB
Be sure to check earnings release dates.