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.
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
RRC Long at $11.85
Total Premium Collected $0.70
RRC Long at $9.20
RIG Long at $8.81
Premium Collected - $1.45
FEYE Long at $17.18
Total Premium Collected $1.06
ET Long at $11.78
ET Short March 13th - $12 call @ $0.35
DBX Long at $19.70
DBX Short March 13th - $20 call @ $0.50
ET Long at $7.50
ET Short March 20th - $8 Call @ $0.60
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I did suggest adding to the ET position yesterday. The position also suggested selling next week's $8 call against the new position.
Yesterday saw a bounce in the market. The S & P closed 135.67 points higher.
And the intra day range ended up at 148.59 points. This was just over 150% of the daily average true range, which is 97.10.
And the day closed at the high for the day.
The S & P gapped higher at the open. The gap open was 66.92 points.
After the gap open, the market sold off to bottom at 2,734.00. From the low, the market rallied all day to hit the high at 2,882.59.
The S & P ended up closing above the high of the bearish long-range candle from Monday.
Actually, yesterday's low took out the low from Monday too.
So, technically yesterday's price action was a key reversal day. This is an outside day when the price bar makes a lower low and a higher high.
And yesterday's price bar was also a key reversal day. A key reversal day is an outside bar and closes above the high of the prior bar.
This is a bullish bar.
Having said that, pre open, the S & P is trading about 95 points lower, as virus fears continue to roil the markets.
This would project to an open around 2,787. This would be below the midpoint, which is 2,808, which should then become resistance.
A key support level from yesterday should be around 2,774 or about 13 points below the projected open.
Watch to see if this level holds as support. If it can't, a test of the low would be expected. The low is 2,734.00 and is the level to watch if 2,774 can't hold.
The low is the key in the short term at the moment. And here is why.
First off, yesterday's price bar was a key reversal day, so a close under the low would be considerably bearish. And would most likely pave the way for a drop to the lower band on the daily chart.
A close under yesterday's low would also be a close under the low of the bearish long range candle from Monday.
I do need to point out that the print for the down to up volume for Monday was changed from 17.08 to 28.55.
This certainly qualifies as the largest selling climax the market has had since the 19.73 print on August 14, 2019.
The second point I want to make is this. Monday was March 9th and was the anniversary of the bear market bottom, which was on March 9, 2009.
There are a few key factors lining up at the moment.
The other key level to watch is the lower band on the 60 minute chart. The lower band is 2,814.20. And the projected open should be about 27 points under the lower band.
This tells us to expect another retest of the lower band after a close back inside.
The other comment is that the bullish percent index now reads 12.20.
ADBE reports Thursday after the close and DOCU also reports the same day.
Here are the Key Levels for the Markets:
$VIX:
Major level: 40.62
Minor level: 39.84 **
Minor level: 38.28
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: 30.48
Minor level: 28.91
The VIX closed at 47.30, closing 7.16 points lower on the day. Watch the major 50 level today. If the VIX clears it, I would expect it to move higher.
But, it should be resistance until taken out.
The VIX is trading well above the upper band on its daily chart, which is 30.23.
It is also trading just under the the upper band on its 60 minute chart. This level is 51.60. Watch this level today.
But, clearly the VIX is overbought.
S & P 500:
Major level: 3,427.40
Minor level: 3,398.35
Minor level: 3,320.25
Major level: 3,281.20
Minor level: 3,242.15
Minor level: 3,164.08
Major level: 3,125.00
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 2,882.23. Watch the minor 2,773.45 level today. A break under it and the S & P should continue lower.
But, the S & P projects to open about 2,787. This would suggest that 2,773 should be support on a selloff.
2,812.50 should be resistance on the upside.
2,814.20 is the lower band on the 60 minute chart. Watch to see if the S & P can clear the lower band. If it can't, expect more selling.
The violation of the lower band tells us that selling is not over.
QQQ:
Major level: 218.75
Minor level: 217.97
Minor level: 216.43
Major level: 215.65
Minor level: 214.87
Minor level: 213.30
Major level: 212.50
Minor level: 211.72 **
Minor level: 210.16
Major level: 209.38 <
Minor level: 208.60
Minor level: 207.03
Major level: 206.25
Minor level: 205.47
Minor level: 203.91
Major level: 203.13
The QQQ closed at 204.11. A break under 203.13 and the QQQ should head lower.
With the QQQ closed back above the midband, which is 195.41. Watch this level for support. A break under it and the QQQ heads lower.
The lower band on the 60 minute is 195. Watch this level today.
IWM:
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
Minor level: 160.94
Minor level: 157.81
Major level: 156.25
Minor level: 154.69
Minor level: 151.56 **
Major level: 150.00 <
Minor level: 148.44 **
Minor level: 145.31
Major level: 143.75
The IWM closed at 134.43. The IWM closed 4.07 higher for the day. But, it still closed under the lower band on the daily chart.
The lower band on the daily chart is 137.96. Clearly an oversold market.
But, this does tell to expect a test of the lower band.
The lower band on the 60 minute chart is 134.35.
TLT:
Major level: 159.38
Minor level: 158.60
Minor level: 157.03
Major level: 156.25
Minor level: 155.48
Minor level: 153.91
Major level: 153.13
Minor level: 152.35
Minor level: 150.78
Major level: 150.00
Minor level: 149.22
Minor level: 147.66
Major level: 146.88
The TLT closed at 162.21. The TLT moved well above the upper band on its daily chart. The upper band is 159.24. Panic buying put the TLT well above this level.
Even with yesterday's 8.78 point sell off, the TLT is still trading above the upper band on the daily chart.
The TLT did break under the lower band on the upper band on the 60 minute chart. That level is 169.83 and is now resistance.
GLD:
Major level: 159.38
Minor level: 158.60
Minor level: 157.03
Major level: 156.25
Minor level: 155.47 **
Minor level: 153.91
Major level: 153.13
Minor level: 152.35
Minor level: 150.78
Major level: 150.00
Minor level: 149.22
Minor level: 147.67
Major level: 146.89
Minor level: 146.11
The GLD closed at 154.48. Watch the minor 155.47 level. A close today under this level and the GLD should drop to 153.
The GLD dropped to the 156 level as expected yesterday.
150 should be technical support.
XLE:
Major level: 56.25
Minor level: 55.47
Minor level: 53.90
Major level: 53.12
Minor level: 52.34
Minor level: 50.78
Major level: 50.00
Minor level: 49.22
Minor level: 47.65
Major level: 46.88
Minor level: 46.09 **
Minor level: 44.53
Major level: 43.75 <
The XLE closed at 35.55. This market is in free fall. The XLE reversed 1.61 yesterday. But, it is still well below the lower band on the daily chart.
The lower band on its daily chart is 47.09. I don't think I have seen a market this stretched.
Clearly another market in panic selling mode.
36.66 is the lower band on the 60 minute chart. And the XLE closed under this level as well.
These two measurements demonstrate how oversold the XLE is.
AAPL:
Major level: 325.00
Minor level: 321.88
Minor level: 315.63
Major level: 312.50
Minor level: 309.38
Minor level: 303.13
Major level: 300.00
Minor level: 296.88 **
Minor level: 290.63
Major level: 287.50 <
Minor level: 284.38
Minor level: 278.13
Major level: 275.00
Minor level: 271.88
Apple closed at 285.34. Apple popped $19.17 or 7.2%.
But, Apple still shows strength by virtue of the fact that it is trading well above the midband on its daily chart. That level is 233.53 and Apple is still about $50 above it.
It should be a stock that moves if we get a bottom.
Having said that, Apple still moves below the lower band on its 60 minute chart. That level is 266. Watch this level today for support.
WATCH LIST:
Bullish Stocks: REGN, DXCM, CME, CLX, GLD, TLT, LSI, TREX
Bearish Stocks: BA, PANW, WEX, WDAY, CBRL, FDX, IT, VMW, MLNX, TWLO, CHKP, GWPH, ALXN, DLTR, WING, DIN, ATHM, ZEN, BLUE
