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
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There is only one open position that expires today and that is the short $14.50 call on AMC. It looks like it will be assigned this afternoon because AMC settled at $15.42 yesterday. This will mean you book the profit on the position. It will work out to a 3.4% return for a 10 day holding period.
The market bounce continued yesterday with a strong day. The S & P 500 closed to the upside 30.65 points, to close at 2,854.88.
And yesterday's range was 42.93 points. With a daily average true range of 26.60 points, I would say that yesterday was also a long-range candle. The range was 161% of the average.
I suspect this should be no surprise to you as we had the confirmation for a move up to 2,890.60 on Tuesday.
And yesterday's close put the market within 40 points of that objective.
Yesterday closed at 87% of the range of the daily price bar, so the odds of violating the high before the low is almost 90%.
This would suggest that support from yesterday's daily bar is in the 2,837 to 2,839 area.
The only issue for you if you day trade, is that there is a tendency for a range contraction after a long-range day.
Certainly, yesterday was the day to day trade. But, I would expect some follow through today with the strong price action.
If we scale back and take a look at how this week's weekly bar is forming, we can see that the range through yesterday is only 47.88 points. So, this tells us that the majority of the move for the week happened in one day.
And with the weekly average true range of 83.31 points, the range so far is 57% of the average so far.
The market would have to rally 35 points today to hit the weekly average true range.
Can this happen?
Certainly, it could, but as I suspect, we will see a contraction after yesterday.
The midpoint of the weekly bar so far is 2,836.37 and yesterday closed about 20 points above it.
I would expect a close above the midpoint.
Pre open, the S & P 500 is trading about 13 points lower. This would project to an open just above the daily support levels and the weekly midpoint.
Watch how price reacts at these levels. Assuming the market holds support, you should see the low of the day come in the morning.
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 13.63 yesterday. The VIX got as high as 14.56 before closing back under 14 again.
But we were looking for resistance at higher levels.
14.06 should be resistance. And if the VIX can break under 13.28, I would suspect it will drop to 12.50.
The 14.40 area should offer technical resistance.
Short term charts remain bearish.
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 2,854.88 level should still be support. And I would expect support at the minor 2,832.03 level.
And the 2,822.30 short term resistance level should act as support as well.
The 30 minute chart has now crossed into an uptrend. This also implies the market should head higher. And technical support should be around 2,800.
QQQ:
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 < HIT!
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
The QQQ closed at 182.57. The QQQ not only took out our objective but managed to close above it.
The next minor level on the upside is 182.81. Two closes above this level and the QQQ should move to 187.50.
As I said the other day, the 181.25 level is a major level for the QQQ. If it can close above it today, a run up to 200 is very possible. The upper band on the daily chart is 192.50, so this would suggest a move up to that 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. The QQQ is up against the upper band on the 30 minute chart, which does indicate it is overbought short term.
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 155.27. Still struggling to clear the midband on the daily chart. And it is starting to look like it won't. Just as I say this, the IWM reverses and is back to testing it.
The midband is 155.93 and yesterday's high of 156.06 actually cleared it. Now the key will be to see if the IWM can close above it.
The objective for the IWM is 156.25. And 156.25 is a key level for the IWM. Similar to the 181.25 level for the QQQ.
I will share the implications if the IWM can close above 156.25.
153.91 is minor support.
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 122.95. This was the second close above 121.88!
At this point, the objective for the TLT should be to 123.44.
122.27 should be minor support. Short term charts remain bullish.
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 123.68. 125 is still the objective for the GLD.
The 30 minute chart just crossed into an uptrend. The midband on the 30 minute chart is 123.15 and should now offer support.
122.66 is minor support.
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 67.29. With a close yesterday above 66.41, this now suggests that the XLE should move up to 68.75.
The 30 minute chart just crossed into an uptrend. 65.40 should offer technical support.
Buy against 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 86.09. Should head to 87.50. The FXY is back to retesting the midband on its daily band. The midband is 86.37.
I am biased for the FXY to fail at the midband, but if it does clear it, it would indicate that the FXY should head higher.
85.94 is minor support. And 85.74 as well. The 30 minute chart has crossed into an uptrend. Technical support should be around 85.70.
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: 197.74
Predicted Low: 192.44
Apple closed at 195.09. Starting to move up and away from the midband.
Two closes above 195.31 and Apple should test 200. 190.63 should offer support.
Apple is an overbought short term. Wait for the pullback to enter.
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.
