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
DYN Long at $12.55
Premium Collected $0.48
VRX Long at $13.69
VRX Short June 30th-$16.50 call at $0.30
APA Long Oct $47.50 Call at $3.45
APA Short Oct $52.50 Call at $1.10
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Volatility certainly is back. After the 19.69 point drop on Tuesday, the market rallied back 21.31 points on Wednesday. The yesterday, the S & P 500 closes down 20.99 points.
Certainly not for the feint of heart.
And pre open, it appears that the markets should open with a bullish bias.
And to make things even more confusing, we have a half day on Monday, followed by the July 4th holiday, in which the markets are closed.
I would expect low volume after lunch today, as the New York traders head for the Hamptons for a long holiday weekend.
Low volume means it is ripe for the computer traders to move the markets. Or perhaps they will turn off their machines early as well and ehad for the beaches.
But, my objective is always to try and make some sense out these moves.
Let me start with the short term 10 minute intra day chart for the S & P 500.
On Tuesday, the S & P 500 broke under the lower extreme band on the 10 minute chart. Wednesday, we had the gap up open and the S & P 500 ran back up to above 2,437.50.
Based on the fact that the market broke under the lower band, we expected a retest of the lower band. At least this is what I mentioned on the webinar this week.
And we certainly got that, with the market sliding yesterday to get back under the lower band again.
And of signficance is the fact that the market closed under 2,421. This is now the second time that the S & P 500 has tested the 2,421 level.
To move lower, we would need a close under that price today.
I need to also mention that price got under the lower band on the 30 minute chart as well. So, we should expect a retest of the lower band on the 10 & 30 minute charts.
Finally, the 60 minute chart remains in an uptrend. I bring this up because, as I have mentioned on a few occasions, when price gets under the lower band on the lower timeframe, and the higher timeframe is in an uptrend, it is usually a decent buying opportunity.
The S & P 500 stopped at 2,405.70 yesterday at around 1:30 EST. From that price, it rallied back almost 20 points in about 2 hours.
I should point out that the lower band on the 10 minute and the 30 minute charts are around the same level at 2,416.23 and 2,416.30, respectively.
A retest of that level should be expected. If it holds, the market should then head up.
But the close today should tell us which direction the market will head.
A close under 2,421.88 today would imply a move down to 2,375.
And a move down to 2,375 would not change the nature of this bull market. It could drop to 2,312 and the bull market would still be intact.
We have one open position that expires today and that is the short $16.50 call on VRX. VRX closed above the strike yesterday. At this point, my suggestion is to leave the position alone. If I do suggest an adjustment, you will receive a separate email.
My feeling is when the S & P 500 hits 2,500. We shall see.
Continue to follow the resistance levels.
Here are the Key Levels for the Markets:
$VIX:
Minor level: 14.45
Major level: 14.06
Minor level: 13.67
Minor level: 12.89
Major level: 12.50
Minor level: 12.11
Minor level: 11.33
Major level: 10.94 ***
Minor level: 10.55 <
Minor level: 9.77
Major level: 9.38
The VIX had a massive spike up to 15.16, before closing at 11.44. This again demonstrates that any long profits on VIX trades should be booked.
Having said that, the VIX did get above the upper band on its short term chart, so a retest of the upper bands is highly likely. The upper band levels are right around the 12.50 level.
And I still expect resistance at 12.50. 10.16 could offer support.
$SPX:
Major level: 2,500.00
Minor level: 2,484.38
Minor level: 2,453.12
Major level: 2,437.50
Minor level: 2,421.88 <
Minor level: 2,390.62
Major level: 2,375.00
Minor level: 2,359.38
Minor level: 2,328.12
Major level: 2,312.50
The key for close today is if the S & P 500 can close above 2,421.88.
Minor support is 2,406.30. And 2,429.70 is also a key short term level for today.
QQQ:
Major level: 146.87
Minor level: 146.09
Minor level: 144.53
Major level: 143.75
Minor level: 142.97
Minor level: 141.41
Major level: 140.63
Minor level: 139.85
Minor level: 138.28
Major level: 137.50 <
Minor level: 136.72
The QQQ closed just 9 cents above the 137.50 level. To move back up, the QQQ will need two closes above 138.28.
I would expect minor support at 135.94. 140.63 should be minor resistance.
IWM:
Major level: 143.75
Minor level: 142.97
Minor level: 141.41
Major level: 140.63 <
Minor level: 139.85 **
Minor level: 138.28
Major level: 137.50
Minor level: 136.72
Minor level: 135.16
The IWM closed at 141.14, or back under the 141.41 level. 142.19 is a minor resistance level. If it clears this level, it should head higher.
140.63 should offer support. 142.97 should be resistance and a tought level to clear.
TLT:
Major level: 131.25
Minor level: 130.47
Minor level: 128.91
Major level: 128.13 **
Minor level: 127.35 <
Minor level: 125.78
Major level: 125.00
Minor level: 124.22
Minor level: 122.66
Major level: 121.88
The TLT broke under the midband and closed at 125.41. It did hit the 125 level, which was the objective.
Minor support is at 124.22. And 125.78 is minor resistance.
GLD:
Major level: 125.00
Minor level: 124.22
Minor level: 122.66
Major level: 121.88
Minor level: 120.32
Minor level: 119.53 ***
Major level: 118.75 <
Minor level: 117.97 ***
Minor level: 116.41
Major level: 115.63
The GLD closed just under 118.75, at 118.32. 117.58 is a minor support level. If this is violated, the GLD should head lower.
117.97 is the key level at the moment. If the GLD closes under that level for two days, it should drop to 115. 118.75 should be resistance.
XLE:
Minor level: 69.53
Major level: 68.75
Minor level: 67.97
Minor level: 66.41
Major level: 65.63 <<
Minor level: 64.85 ***
Minor level: 63.28 <<
Major level: 62.50
Minor level: 61.72
The XLE continues to struggle to clear the 65.63 level. Minor support should be at 64.45. The objective should be to 65.63.
64.41 should also be minor resistance.
FXY:
Minor level: 87.89
Major level: 87.50
Minor level: 87.11
Minor level: 86.33 <
Major level: 85.94 **
Minor level: 85.55
Minor level: 84.77
Major level: 84.38
Minor level: 83.60
Minor level: 83.20
Major level: 82.81
The FXY hit a low of 85.20 before rallying to close at 85.86. We were looking for a bounce in the FXY because of the short term oversold condition. This is what I suggested trailing a stop if you followed the short strategy I outlined.
Longer term I still expect a move down to the 81 to 82 area.
85.94 should be resistance, but if this level is cleared, if could run to 87.50.
AAPL:
Major levels for Apple are 162.50, 156.25, 150, 143.75, and 137.50
Apple closed just under the 143.75 support level. I don't see Apple falling under 140.63.
Short term Apple is oversold. And short term momentum is still bearish.
WATCH LIST:
Bullish Stocks: REGN, TSLA, AGN, HUM, FDX, BDX, ANTM, UNH, ANTM, CI, EXPE, NVDA, BABA, WYNN, JNJ, CELG, VRTX, KMB
Bearish Stocks: BWLD, AAP, CASY, CLB, CVS, DG, DLTR, SLB, TSCO, TGT, FL, SFLY, DKS, BGS, HAIN, DVN
Be sure to check earnings release dates
