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
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There is one position that expires today and that is on SNAP. I will look to unravel the trade today. I expected a bit of a pullback on SNAP, like most stocks during this selloff, but quite frankly, it literally has not moved in 4 days.
The market continued the slide from Wednesday. For the day, the S & P 500 ended up closing 6.21 points to the downside. It closed the day at 2,917.52.
The sell off could have been much worse, as the low for the day was 2,900.50 before the market rallied about 17 points into the close.
The range for the day ended up being 31.18 points. This was almost 150% of the daily average true range of 21.58 points.
Also, the market ended up closing at 55% of the daily bar. So, the price action ended up rather neutral.
The real question at the moment, is this the start of a much deeper correction?
I think for a deeper pullback to happen, the market will need to spend a little more time consolidating at the top. And the objective for the S & P 500 still remains to the 2,968.80 level.
And I do think we make another run to try and take out that level.
I say this because the short term 30 and 60 minute charts are still bullish for the S & P 500. And rarely do deep corrections begin when price is in that formation.
At the minimum, the 30 minute chart should cross into a downtrend as a warning that a deeper pullback is coming.
I also mentioned that the S & P 500 will need two closes under the minor 2,910.15 level to invalidate the move to 2,968.80.
Yesterday's low did fall under the 2,910.15 level, but the market managed to close above it.
So, for the market to fall, we would expect two closes under 2,910.15.
The weekly price bar is shaping up for another contraction. And at this point, the midpoint is 2,927.32, which is about 10 points above yesterday's close.
No doubt this level will be tested today. Pre open, the S & P 500 is trading about 8 points higher, so I would expect 2,927.32 to be a key price level for today.
If the market can get above this level, look for it to hold as support. If it can't, it should be resistance.
The support level from yesterday's daily bar is in the 2,916 to 2,920 area.
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
The VIX closed at 14.42 yesterday. It actually ended up closing to the downside 0.38 points.
The VIX did hit the 15.63 level with a high of 15.92. But, the VIX was repelled at the midband on the daily chart which is 15.97.
At this point, the minor 14.85 level should act as resistance. And if the VIX closes under 14.85 today, I would expect another drop to 12.50.
SPX:
Major level: 2,968.80 <
Minor level: 2,949.25 **
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
The upside objective is still to 2,968.80. To invalidate this, the S & P 500 would need to close under 2,949.25 today.
But watch the 2,929.70 today. If the S & P 500 can recoup this level, I would expect the market to continue higher. This is a key level in the short term
2,954 should be short term resistance.
Short term charts remain firmly bullish. Technical support is around 2,910.
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 188.11. The next objective for the QQQ should be to 193.75.
Minor support is at 188.28. Watch to see if the QQQ can reclaim this level today. If it can, it should head higher.
Technical support is still 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 <
Minor level: 154.69 **
Minor level: 151.56
Major level: 150.00
Minor level: 148.44
The IWM closed at 157.52. And yesterday's low broke under 156.25, but the IWM did manage to close above it. We did expect support at 156.25 and still do.
And support should also be at the midband which is 156.40. And like the 156.25 level, the IWM fell under the midband, but recouped it.
If the IWM can clear 157.81, it should head higher.
Both short term charts are bullish. And technical support is around 156.
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 123.31. To move lower, the TLT will need two closes under 123.05.
The 30 minute chart has crossed into an uptrend. I am biased to the upside. Look for support at 123.05. If this level cannot hold in the short term, I would expect a further pullback,
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 119.94. At this point, if the GLD breaks under 119.53, it should head lower.
The midband on the daily chart is 119.04. At this point, it should be support. But as you know, if the GLD breaks under it, expect lower prices.
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 63.66. Starting to look like the XLE is in free fall. But, it's a classic example of the midband offering resistance.
I will show this chart in next week's webinar.
At this point, a drop to 62.50 should be expected. 62.50 should be support, but if it cannot hold, a much deeper pullback should happen.
65.63 should now be resistance.
The 30 minute chart has crossed into a downtrend. Short term momentum is shifting to the downside. But, the XLE is oversold in the short term.
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 209.15. Apple pulled back after the positive earnings gap.
The 202 area would be a great area to get long. Expect a few days of consolidation before it begins to move again.
Short term charts remain bullish. And technical support is also around 202.
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.