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 - $2.20
SNAP May 4th $11.50 call for $0.13
SNAP May 4th $10.40 call for $0.68
RRC Long at $11.85
Total Premium Collected $0.70
RIG Long at $8.81
Premium Collected - $1.45
FEYE Long at $17.18
Total Premium Collected $0.80
CLW Long May - $20.00 call for $2.00
AMC Long at $16.16
Total Premium Collected $0.35
GRUB Long May 4th $66 call for $1.60
GRUB May 4th $70 call for $0.40
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I suggested you close the short term debit spread on GRUB yesterday. It appeared that GRUB was breaking and I felt it was better to preserve some capital, as opposed to what could potentially be a total loss.
The problem with trading short-dated options is that you really need the stock to move in your direction almost immediately. The advantage of short-dated options is they give you the best leverage. You cannot get better leverage unless you are trading weekly options that expire that same day.
Yesterday closed out the month of April. And for the month, the S & P 500 closed out the month 101 points higher. The month closed at 2,945.83.
This puts the market within 23 points of the objective we have been looking for.
The odds, based on the April monthly price, favor the objective being hit.
This is because the April monthly price bar closed out at 96.3% of its range. So, the odds are almost 100% that the high of 2,949.52 will be violated before the low of 2,848.63.
The range for the month was 101. And the monthly average true range is 160 points. So, for the month, the range was only 62% of the average. I suspect that was the only negative about last month.
The major positive for the market is that the upper band on the monthly chart is 2,846.61. And the month closed out about 100 points above the upper band.
Even though the markets are seriously overbought, we still have to respect the uptrend.
And with the specific levels we track, we should be warned if a major shift is to occur.
Of course, a close under the upper band would be a major change for the market.
And the major objective of 2,968.80 is also a key level for this market. I've already outlined the scenarios that could happen at the objective, so I will not rehash that today.
For the day, the S & P 500 closed 2.80 points higher. For the day, the market closed at 90% of the daily bar, so the odds do favor the high being violated.
This should happen right at the open because the market is trading about 9 points higher as I write this.
Support from yesterday's bar should be at the high, which was 2,948.22 and at the 2,936 to 2,941 area, if it pulls back below the high.
The projected open, assuming the trading holds up until the open, should be around 2,954 or within 14 points of our objective.
Apple is trading about $11 higher pre-market based on reporting last night.
Here are the Key Levels for the Markets:
$VIX:
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 <
Minor level: 11.72 **
Minor level: 10.16
Major level: 9.38
When I posted the closing prices yesterday, the VIX showed a close of 13.10. This morning I am getting a print of 13.12.
I know you are thinking what is the big deal about 2 cents?
But, the VIX closed Monday at 13.11. A close one penny above the Monday close would mean that this is now the second consecutive day where the VIX and the S & P 500 diverged.
And to me, that would be significant.
The VIX was still not able to close above the 13.28 level. It did get above it, getting as high as 14.05 before closing under it. By the way, 14.06 is a minor resistance level.
And once again, 13.28 should still be resistance.
The 13.28 level once again offered resistance as we expected.
A break under 12.89 and the VIX should head lower.
SPX:
Major level: 2,968.80
Minor level: 2,849.25
Minor level: 2,910.15 **
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 upside objective is still to 2,968.80. And the S & P 500 continues to inch higher towards the target. Watch for potential support or resistance at yesterday's high which was 2,948.22.
Minor support is at 2,929.70.
Short term charts remain firmly bullish.
Continue to buy against support. Technical support is around 2,931.
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
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 out yesterday at 189.54. The next objective for the QQQ should be to 193.75 and the QQQ continues to inch closer.
Minor support is at 188.28 and 189.06.
Technical support is around 187.
Like the S & P 500, both short term charts are bullish. And like the S & P 500, the QQQ is very close to crossing into an uptrend on its daily chart.
Continue to buy against support.
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 < HIT!
Minor level: 154.69 **
Minor level: 151.56
Major level: 150.00
Minor level: 148.44
The IWM closed at 158.29. The objective for the IWM should be to 162.50.
Now that the IWM has cleared the midband, look for support there. It now reads 156.36.
Minor support is still at 157.81.
Both short term charts are bullish. And technical support is around 157.
TLT:
Major level: 126.56
Minor level: 126.17
Minor level: 125.39
Major level: 125.00
Minor level: 124.61
Minor level: 123.83
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
The TLT closed at 123.65. The TLT managed to close back above 123.05. Back to a bias at 125.
124.22 should now be resistance. And minor support is at 123.05.
The 30 minute chart is close to crossing into an uptrend. If it does, look for higher prices.
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: 121.09 **
Major level: 120.31<
Minor level: 119.92
Minor level: 119.14
Major level: 118.75 <
The GLD closed at 121.20. 121.88 is minor resistance. And 119.53 is minor support.
A break under 119.53 and the GLD should head lower.
Technical resistance at 121.45. And minor technical support is at 120.50.
Both the 30 minute and 60 minute charts remain bearish.
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 66.11. 65.63 should still be a major support level. A break under 66.02 and the XLE should drop to 65.63.
The 30 minute chart has crossed into a downtrend. Short term momentum is shifting to the downside.
AAPL:
Major level: 212.50
Minor level: 210.94
Minor level: 207.81
Major level: 206.25 < HIT
Minor level: 204.69
Minor level: 201.56 **
Major level: 200.00
Minor level: 198.44
Minor level: 195.31
Major level: 193.75
Minor level: 192.19
Apple closed at 200.67. Apple is up about $10 after reporting and is trading around $210.
It should run to the 212.50 level.
Definitely overbought in the short term. But, I do not suggest shorting this stock.
Short term charts remain bullish. And technical support is also around 201.
WATCH LIST:
Bullish Stocks: NOW, FLT, MA, LRCX, WDAY, VRSN, HON, CRM, V, ADP, DECK, CME, CB, DIS, WIX, MSFT, SPLK, KLAC, HSY, ADI, PYPL, TSCO
Bearish Stocks: TSLA, SPOT, CVX, PSX, RHI, WSM, WBA, BG, Z, STLD
Be sure to check earnings release dates.