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
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I did suggest another short term covered call yesterday. The alert was on DBX and you should have sold the $20 call that expires next week against the position.
The market saw more volatility yesterday. After opening with a 6.23 bullish gap, the market ran to a high of 3,136.72.
Then a surprise rate cut of 50 basis points was announced and the S & P proceeded to sell off the balance of the day.
After topping out at 3,136.72, the S & P dropped to a low 2,976.63. The intra day range ended up being a massive 160.09 points.
Once again, this qualified as a long range day. With a daily average true range of 70.88, yesterday's range was 226% of the average.
The down to up volume was only 3.73, so yesterday was not a selling climax.
But, we have seen three selling climaxes already in this downswing.
For the day, the S & P closed 86.86 points lower. The day closed out at 3,003.37.
I do want to point out that the range for the day was essentially one level. A one-level move is 156 points and yesterday's range was 160 points.
Quite frankly, I don't remember daily swings of this magnitude.
The key at the moment is that the S & P is trading around the midband on its daily chart. That price level is 3,009.76.
And Monday's rally put the S & P above the midband. Yesterday, the S & P gave that move back and closed under the midband.
This is an important level. And if the S & P can hold this level, we should see a move higher.
If it can't, a drop to the lower band is quite possible. The lower band is 2,597 and yesterday's close was about 400 points above that level.
Yesterday's move was a retest of the lower band on the 60 minute chart.
After the sell off, the S & P dropped to the lower band, which is 2,987.54. And the market essentially sat at the lower band for about 2 1/2 hours.
The low for the low was 2,976.63 or about 10 points under the lower band,
Remember that the sell-off last week put the market well below the lower band on the 60 minute chart.
We expected a retest, however, I did expect a stronger bounce before the retest.
But, at this point, the lower band should be support. This would suggest that the next move should be to a test of the midband on th 60 minute chart, which is 3,271.
Pre open, the S & P is trading about 68 points higher. Assuming this trading holds until the open, the market should open around 3,071.
Watch to see if the market can take out yesterday's high, which was 3,136.72.
And support on a sell off should be around 3,057.
Earnings are slowing this week. We hear from SPLK on Wednesday after the close.
And Thursday afternoon, we get earnings from COST.
Here are the Key Levels for the Markets:
$VIX:
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
Major level: 28.13
Minor level: 27.35
Minor level: 25.78
Major level: 25.00
Minor level: 24.22
Minor level: 22.66
Major level: 21.88
The VIX closed at 36.82, closing 4.40 points higher on the day. The VIX will have to drop under 36.72 to head lower.
And the VIX was right at the upper band on the 60 minute chart. That price is 38.29. This should be resistance.
But if the VIX manages to take it out, look for a pullback in the market. The 33 area could offer technical support.
It continues to trade above its upper band on the daily chart. The upper band is now 25.32.
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
The S & P closed at 3,003.37. Watch the minor 3,085.95 level. If the S & P can clear 3,085.95, it should test 3,125.
The lower band should now offer support. That price level is 2,987.54.
Minor resistance is at 3,069. The S & P needs to clear this level to move higher. And it should open above it, which would suggest it would be support.
QQQ:
Minor level: 219.56 **
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: 210.17 **
Major level: 209.39 <
Minor level: 208.61
Minor level: 207.04
Major level: 206.25
Minor level: 205.47
Minor level: 203.91
Major level: 203.13
The QQQ closed at 209.48. The QQQ moved three levels yesterday. At this point, if the QQQ can hold above 210.17, I would expect a move up to 212.50.
209.39 should offer support, as well as 210.17.
The midband on the 60 minute chart is 223. And 213 should offer technical support,
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 147.95. The IWM will need to clear 148.44 to head higher.
The midband on the daily chart is 155.41 and the IWM is trading just under it. This level should be resistance, until it is violated.
148.28 is the low band on the 60 minute chart. Watch for support at this level.
TLT:
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
Minor level: 146.10
Minor level: 144.53
Major level: 143.75
The TLT closed at 156.33. The upper band is 156.82 and yesterday's high went to 159.70, before closing just under it.
The upper band should be resistance. Watch this level today.
The upper band on the 60 minute chart is 157.23 and should be resistance.
GLD:
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
Minor level: 144.54
Major level: 143.75
The GLD closed at 153.89. Watch the minor 153.91 level today. Two closes above 153.91 and the GLD should move up to 156.
156.96 is the upper band on the 60 minute chart. Watch for a retest of this level today.
149 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 45.66. Still trading well under the lower band on the daily chart, which is 49.61.
The XLE is still above its lower band on its 60 minute chart. That price is 44.12 and should be support.
43.75 should offer support. The 47.50 area could offer minor resistance.
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 289.32. Apple had a strong bounce, closing $25.45 higher.
The lower band on the 60 minute chart is 278 and should offer support.
The 287 area should provide short term technical support.
WATCH LIST:
Bullish Stocks: REGN, TLT, EVBG, AMN, GILD, NTRA, PDCO
Bearish Stocks: BA, ALGN, VRSN, WDAY, MMM, FDX, WIX, EEFT, TWLO, PYPL, EXPE, YUM, RCL, ZEN, CHRW, CXO, DNKN, W, PLCE
