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
SNAP Long at $14.54
Total Premium Collected - $1.65
RRC Long at $11.85
Total Premium Collected $0.70
RIG Long at $8.81
Premium Collected - $0.81
RIG Short March 29th - $10.50 Call @ $0.35
FEYE Long at $17.18
Total Premium Collected $0.55
FEYE Short March 29th - $17.50 Call @ $0.25
FCX Long at $12.74
Total Premium Collected $0.48
FCX Short March 29th - $13 Call @ $0.24
AMC Long at $14.44
AMC Short March 22nd - $14.50 Call @ $0.43
.........................................................................................
At 2:00 yesterday, we got the FED statement regarding interest rates. The market really has not experienced volatile tradings days around this event ... until yesterday.
Here is what I mean.
The S & P 500 opened at 2,831.34 and dropped to a low of 2,812.43 at 12:30 EST. From the low, the market ran up to a high of 2,843.54 at about 3:00 EST.
Of course, the bulk of the 31-point move happened right after the FED announcement.
And after topping out, the S & P 500 sold off almost 20 points to close at 2,824.23.
So, from the open to the low of the day, the S & P 500 dropped about 20 points then recovered with a 31 point spike, and finished the day with an almost 20 point drop.
If you add this up, you get swings totaling 71 points.
I bring this up because most of the recent FED days have been rather tepid, until now. When you consider that the daily average true range is 25.35 points, yesterday's swings were almost three times the daily average.
If you were trading intra day yesterday, the most important fact for the day was that you knew in advance that the major 2,812.50 level should offer support after being violated. And after two consecutive closes above 2,832.03, I mentioned just yesterday that 2,812.50 should be strong support.
And as it just so happens to turn out, the low for the day was 2,812.43. Pardon me for being off by 7 cents.
I say that in jest because as you know, these levels tend to be support or resistance areas and price can exceed these levels by up to 4 points and they can still be valid. But yesterday, it just so happened that the daily low stopped virtually on our level.
Can you make some money if you know in advance what the support level should be?
I'll leave you to ponder the answer to that question.
But, not only did the daily low stop at our resistance level, it was about one point above the lower extreme bollinger band on the 3 minute chart. BTW, the 3 minute timeframe is my preferred time chart for trading intra day.
So, you could have bought the low with a risk of about 2 points.
With the selloff late in the day, the S & P 500 ended up closing at 38% of the daily bar. This puts the odds of taking out yesterday's low before the high at around 60%.
And pre open, the S & P 500 is trading about 9 points lower.
This projects to an open around 2,815 or about 3 points above the support level. At this point, 2,812.50 should still be support. And as I said above, these levels can be violated by a few points and still be valid.
The resistance level from yesterday's daily bar should be in the 2,829 area.
The support area from last week's weekly bar continues to be in the 2,785 to 2,794 area.
This afternoon, we will get earnings from NKE. And TIF reports before the open on the 22nd.
Here are the Key Levels for the Markets:
$VIX:
Minor level: 22.66
Major level: 21.88
Minor level: 21.10
Minor level: 19.53
Major level: 18.75
Minor level: 17.97
Minor level: 16.41
Major level: 15.63 <
Minor level: 14.85 **
Minor level: 13.28
Major level: 12.50
The VIX closed out at 13.91 yesterday. The VIX got as high as 14.30 before closing under 14.
At this point, I still believe that higher levels should be resistance and for a trend change to happen, the VIX needs to rally above 21.88.
In the short term, a move up to 15.63 would be expected. But, I would expect resistance at 15.63.
And resistance still exists at higher levels, until that can happen. Namely, at the 15.63 and 14.85 levels.
Short term charts remain bearish which implies that a rally will fizzle out.
SPX:
Major level: 2,890.60 <
Minor level: 2,871.08
Minor level: 2,832.03 **
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
The major 2,812.50 level should still be support. And I would expect support at the minor 2,822.30 level.
The 30 minute chart has now crossed into an uptrend. This also implies the market should head higher. And technical support should be around 2,795.
QQQ:
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
Minor level: 167.19
Minor level: 164.06
Major level: 162.50
Minor level: 160.94
The QQQ closed at 179.76. The objective for the QQQ is still to 181.25. And yesterday's high came to 37 cents of it!
178.13 is a minor support level.
The 30 minute chart has moved into an uptrend. Technical support should be at 175. Buying against support is the best strategy at the moment.
A selloff sets ups a buying opportunity.
IWM:
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
The IWM closed at 153.26. Still struggling to clear the midband on the daily chart. And it is starting to look like it won't.
Of course, this is a key level to monitor. The midband is now 155.93.
153.13 should be support. And minor support should be at 152.34. Two closes under 152.34 and the IWM should drop to 150.
TLT:
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
Minor level: 119.92
Minor level: 118.14
Major level: 118.75
Minor level: 118.36
Minor level: 117.58
The TLT closed at 122.68. Finally. The first close above 121.88!
And it closed above the next minor level which is 122.27. A close today above it would indicate a move up to 123.44.
122.27 should be minor support.
GLD:
Major level: 126.56
Minor level: 126.17
Minor level: 125.39
Major level: 125.00 <
Minor level: 124.22
Minor level: 122.66 **
Major level: 121.88
Minor level: 121.10
Minor level: 119.53
Major level: 120.31
Minor level: 119.92
Minor level: 119.14
Major level: 118.75
The GLD closed at 124.18. The objective now should be to the 125 level. And yesterday, the GLD came within 65 cents of it.
The 30 minute chart is still bearish. And the GLD closed right on the midband which is 123.39. If the GLD can clear this level, it should continue higher.
122.66 is minor support. And yesterday's low was 122.65.
XLE:
Major level: 71.88
Minor level: 71.10
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
Minor level: 60.16
Major level: 59.38
The XLE closed at 66.82. The XLE will still need two closes above 66.41 to suggest a move higher. And yesterday was the first one.
But, at this point, 65.63 should be support. If the XLE does break under 65.63, I would not expect a drop under 64.06.
The 30 minute chart just crossed into an uptrend. 65.30 should offer technical support.
FXY:
Major level: 89.84
Minor level: 89.65
Minor level: 89.26
Major level: 89.06
Minor level: 88.87
Minor level: 88.48
Major level: 88.28
Major level: 87.50
Major level: 86.72
Major level: 85.94 <
Minor level: 85.75
Minor level: 85.36 ***
Major level: 85.16
Minor level: 84.97
The FXY closed at 86.26. Should head to 87.50.
85.94 is minor support. And 85.74 as well.
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: 185.94
Minor level: 182.81
Major level: 181.25
Predicted High: 190.46
Predicted Low: 185.86
Apple closed at 188.16. Apple closed again above the midband which is now 186.23.
Next minor level on the upside is 189.06. 184.38 should be support.
WATCH LIST:
Bullish Stocks: CMG, ROP, BDX, COST, ZBRA, SHOP, MCD, CLX, MCD, VRSK, KMB, MLNX, YUM. MSFT, PYPL, NKE, WPX, D, ETSY, CREE
Bearish Stocks: DPZ, FFIV, URI, STMP, LVS, FIZZ, SFLY, CBT, AN, STLD
Be sure to check earnings release dates.