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
SNAP Long at $14.54
Premium Collected - $1.65
..........................................................................................
You should have closed out the APA option position yesterday. The trade booked a quick 2 day profit of 22%.
I do want to remind you that markets will be closed this coming Monday in observation of Memorial Day here in the United States. Markets re-open Tuesday. I would expect light trading today as the New York traders head out early to get a jump on the long weekend.
Yesterday, the S & P 500 closed at 2,727.76. For the day, it was down 5.53 points. And the VIX also closed to the downside as well. The VIX closed 5 cents lower.
As you know, this is a divergence that usually leads to a change of direction for the markets.
The high for the day came within 2.43 points of the 2,734.40 objective.
If we look at the weekly price setting up this week, we see that the market made very little headway. The week opened at 2,725.95 and closed yesterday at 2,727.76.
The market closed about 2 points above the open yesterday.
And the high for the week so far is 2,742.24 and the low is 2,707.38. The range for the week is 34.86. This puts the midpoint for the week at 2,724.81. And we closed just above that level yesterday. Watch this level today.
And at this point, the average true range is 73.02 for the week. This means the range for the week is setting up to contract.
As it stands now, the S & P 500 would form a narrow range doji bar. The market will have to rally higher today to not form this price bar.
So, watch the high of 2,742.24 to see if the market can move higher.
Pre open, the S & P is trading about 2.75 points higher. Support should be around 2,723.40.
Watch to see if the VIX does bounce from its oversold condition. if it continues lower, look for the markets to continue higher.
Continue to monitor the longer term levels for the market.
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
The VIX closed at 12.53. This was just 3 cents above our objective of 12.50. And the low for the day was 12.53 as well.
Target hit! What's next?
We certainly have to be mindful that the VIX could rally off this level. Time to lighten up on long positions and consider selling calls against your open positions.
At this point, look for a bounce in the VIX. It will need two closes above 14.06 to move up to 18.75.
Watch to see if the VIX breaks under 12.50.
$SPX:
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
Major level: 2,578.10
Minor level: 2,558.58
The S & P 500 has managed to close above the minor 2,714.88 level fore the fourth consecutive day. On the upside, we still have the 2,734.40 objective and minor resistance at 2,744.10.
The S & P 500 would have to clear 2,744.10 to continue higher. 2,723.40 should be support on the downside.
The VIX should help to confirm the next move.
QQQ:
Major level: 175.00 <
Minor level: 171.88
Minor level: 165.63 **
Major level: 162.50
Minor level: 159.38
Minor level: 153.13
Major level: 150.00
Minor level: 146.88
Minor level: 140.63
Major level: 137.50
The QQQ closed at 169.55. 168.36 aand 168.75 should now be minor support.
171.09 is the level on the upside that should could offer some resistance.
IWM:
Major level: 165.63
Minor level: 164.85
Minor level: 163.28
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
The IWM closed at 162.03. The IWM reversed yesterday.
At this point, I am looking for support at 161.72. And the IWM can trade above 162.50, look for that level to offer support.
If the IWM cannot clear 162.50, we could see a pullback.
TLT:
Minor level: 121.49
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 closed at 118.88. The TLT took out the 118.75 objective by 13 cents.
Watch the 119.14 minor level. If the TLT can close above this level for two days, it should test 120.31.
The TLT is bouncing from its oversold condition.
GLD:
Major level: 128.13
Minor level: 127.35
Minor level: 125.78
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 GLD closed 123.59, closing above the major 123.44 level. The next level to the upside is 125 and I would expect strong resistance there.
123.44 is minor support now. And 123.05 should also offer support.
XLE:
Major level: 81.25 <<<
Minor level: 80.47
Minor level: 78.91
Major level: 78.13 <
Minor level: 77.35
Minor level: 75.78 **
Major level: 75.00
Minor level: 74.22
Minor level: 72.66
The XLE closed at 76.57 yesterday. The upper band is now 79.48.
I don't expect the XLE to drop under 75.78. If it does however, it should continue lower.
The XLE is sitting right on a short term support line, which is 76.56.
FXY:
Major level: 87.50 <
Minor level: 87.31
Minor level: 86.92 **
Major level: 86.72
Minor level: 86.53
Minor level: 86.14
Major level: 85.94
Minor level: 85.75
Minor level: 85.36
Major level: 85.16
The FXY closed at 87.65. The FXY already took out the 87.50 level. On a bounce, the FXY should fail at 87.50. Watch this level. If it does hold, the FXY should continue higher.
Ultimately, a larger drop to the 84 to 85 area is expected. Sell against resistance.
Price is also above the midband on the daily chart. That level is 86.97. It should now offer support.
AAPL:
Major level: 190.63
Minor level: 189.85
Minor level: 188.28 **
Major level: 187.50
Minor level: 186.72
Minor level: 185.16
Major level: 184.38
Apple closed at 188.15. 187.50 should be support. And if Apple can close above 188.28 today, it should move up to 190.63.
Both short term charts, the 30 & 60 minute remain bullish.
WATCH LIST:
Bullish Stocks: CMG, BA, GWW, ALGN, ILMN, COST, BLUE, AMGN, DE, HON, FANG, VRSN, EOG, VLO, SPLK, CNC, GRUB, SFLY, WAB, WIX
Bearish Stocks: CHTR, EQIX, LOGM, RCL, DTE, CHKP, SINA, ED, BCO, BG, D, PZZA
Be sure to check earnings release dates.