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
AMC Long at $15.27
Premium Collected - $3.10
Short March 29th-$15 Call @ ($0.30)
UNIT Long at $17.00
Premium Collected - $0.35
VRX Long at $16.40
Short April 6th-$16.50 Call @ ($0.50)
Premium Collected - $0.50
.......................................................................................... Yesterday, you should added another round of short calls on AMC. And we had a new position added with VRX and a short call on that deal.
As for the market, it tried to digest the remarks from the Fed and their rate increase. The S & P 500 ended up closing down 5.01 for the day. It closed at 2,711.93. This is back under the minor level of 2,714.88.
The market was essentially flat all day waiting to hear from the Fed. Then at 2:00 EST, after the announcement, the S & P 500 ran up to a high of 2,739.14. From there it immediately gave back those gains and more, to hit a low of 2,709.79.
So, for the day, the range ended up being 29.39 points and for the day, the market closed at 7% of the daily price bar.
This now tells us two things for today.
The first is that there is a 93% chance that the low from yesterday will be violated before the high. And that should certainly be true because as I write this, the S & P 500 is trading almost 17 points to the downside.
This would put the open well below yesterday's low of 2,709.79, with an anticipated open of around 2,695.
The second thing we know from yesterday is that if the S & P 500 closes under 2,714.88 again today, the downside objective should be to 2,656.30.
We can begin to look at last week's weekly price bar to estimate where the market should go.
For example, last week, the market had a range of 60.43 points. If I subtract that from the high this week of 2,741.38, it projects a low of 2,680.95. That is about 30 points under yesterday's low.
If we project using the weekly average true range, which now reads 68.88, off this week's high, we get a low of 2,672.50.
So based on these projections, we get a projected low for this week in the 2,672.50 to 2,680.95 area.
Also, a short term support level is at 2,675.80, which is right in the area above. The 2,675.80 level has significance because if the market closed under it for two days, it could drop to 2,602.
Of course, the selling could intensify, but this gives us some logic to determine what the market could do.
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
Both the S & P 500 and the VIX closed to the downside yesterday, with the VIX closing at 17.89.
Watch to see if the VIX can clear the 18.75 level. I still expect resistance at 18.85, so if the VIX clears 18.75, look for it to head higher and the markets to continue lower.
Minor support is still at 17.19. And minor resistance is at 21.88. To move down to 12.50, the VIX will need two closes under 17.19.
$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 <
We know a close under 2,714.88 today implies a drop to 2,656.30. Minor support is 2,700.20.
Based on pre open market activity, the market should open under 2,700.20. So, expect this level to offer resistance on a bounce.
Also, watch the levels I mentioned above for a possible weekly bottom.
QQQ:
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
The QQQ closed at 166.92. The downside objective should be to 162.50. Longer term the QQQ could drop to 150 and that would be a great area to get long
The 60 minute chart still remains in an uptrend, but the 30 minute chart has moved into a downtrend. Short term momentum is shifting to the downside.
IWM:
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
Minor level: 153.91
Major level: 153.13
The IWM closed at 157.15, just above the minor 157.03 level. The low for the day was 156.20, just 5 cents under the major 156.25 level.
To move higher, the IWM will need to close above 157.03. With the weakness at the open with the S & P 500 and the NASD, look for a drop back under 157.03 today.
If the IWM breaks under 156.25, I would expect support at 153.13.
TLT:
Minor level: 120.70
Major level: 120.31
Minor level: 119.92 **
Minor level: 119.14
Major level: 118.75 <
Minor level: 118.36
Minor level: 117.58
Major level: 117.19
Minor level: 116.80
Minor level: 116.02
Major level: 115.63
The TLT got as low as 118.11 before recovering and closing at 119.08. This is just 8 cents under the minor 119.14 level. Two closes above 119.14 and the TLT should test 120.31.
The TLT continues to remain oversold and I would expect the 118.75 level to offer support. I also expect the TLT to trade in a range before the next minor move.
GLD:
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: 121.87
The GLD closed at 126.48. A close today above 125.78 and the GLD should test 128.13. Minor support should be at 125.78.
Short term charts remain bearish.
XLE:
Minor level: 76.95
Major level: 76.56
Minor level: 76.17
Minor level: 75.39
Major level: 75.00
Minor level: 74.22
Minor level: 72.66
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
The XLE closed at 68.58. The high for the day was 69.02, just 44 cents above the major 68.75 level. Perhaps the XLE will have the breakout we have been looking for.
If the XLE can clear the 68.75 level and not fall back to 65.63, it could be the start of a significant move.
FXY:
Major level: 91.41
Minor level: 91.22
Minor level: 90.83 **
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
The FXY bounced again and closed at 90.52. It continues to bounce just under the upper band on the daily chart.
Watch to see if the FXY can clear the 90.63 level. This resistance level is right at the upper band, which is 90.82. Either the FXY clears the upper band or it fails and begins to head lower.
AAPL:
Major level: 187.50
Minor level: 185.94
Minor level: 182.81
Major level: 181.25
Minor level: 180.47
Minor level: 178.91 <
Major level: 178.13
Minor level: 177.35
Minor level: 175.78
Major level: 175.00
Apple broke down and closed at 171.27. Apple could not hold the 175 level, with a high of 175.09. Looking now for a drop to 168.75.
168.75 is a key level. If Apple has two closes under 168.75, it could drop to 150.
WATCH LIST:
Bullish Stocks: NTES, GWW, AVGO, NVDA, ADBE, ALNY, AMT, ZBRA, VRSN, GRUB, ALL, CTSH, AABA, WEC, LUV, DAL, SQ, CAR, WGO, TRIP, TWTR
Bearish Stocks: TSLA, ZBH, DIS, CNI, BG, WBA, WBA, AIG, HOG, DISH, BITA
Be sure to check earnings release dates.