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 $0.80
DVA Short November 8th - $61.50 call for $0.80
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The long $155 put on CRM did expire on Friday afternoon. Even with a total loss on the hedge, the overall position still earned 40% in 3 days.
Now onto the markets.
The S & P 500 continues to tick up to our objective. The S & P 500 closed out the week at 3,093.03. This was a gain of 7.85 points.
The range for the day was 19.45, which is still below the daily average true range, which is now 24.57.
The daily bar closed at 100% of the range, which tells us the high should be violated before the low.
The support area from Friday's daily bar is in the 3,083 to 3,087 area.
With all these daily contractions, you would expect the weekly price bar to contract and that is exactly what happened.
The range for the week was only 31.88 points. And with a weekly average true range of 71.66 points, the range for the week was only 44% of the average.
When you consider that we have had daily ranges greater than the weekly range, you can see how much the market has been contracting.
But, the weekly price bar did close higher, so momentum is still bullish.
The week bar closed out 26.12 points higher.
The support area from last week's price bar is in the 3,082 to 3,086 area.
The main concern once again is that the VIX is down to long term support. In fact, Friday closed under the major 12.50 level. It hit a low of 12 on Friday. We know that the minor 11.72 level is a key level on the downside.
If the VIX cannot break under 11.72, it could bounce resulting in profit-taking coming in.
Pre open, the S & P is trading about 12 points lower.
Assuming this trading holds until the open, the market should open right around the weekly midpoint, which is 3,081.83.
Watch to see if this can hold. If it can't, look for a move lower.
Earnings do continue this week, but the number of companies reporting is slowing down.
SWKS reports tomorrow after the close. And CSCO reports Wednesday after the close.
Here are the Key Levels for the Markets:
$VIX:
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 <
Minor level: 11.72
Minor level: 10.16
Major level: 9.38
The VIX closed out at 12.07 on Friday yesterday. As I mentioned above, this is now the first close under the major 12.50 long term support level.
The last time we had a cluster of one or more closes under 12.50 in the VIX was back in July.
For a bit of history, the VIX closed at 12.16 on July 26th. It closed at 12.07 on the 24th. So, there were two closes under 12.50 that week.
The S & P closed at 3,025.86 on July 26th. Two days later, the S & P 500 was trading 105 points lower.
This is an event to pay attention to.
13.28 should still be resistance until it is violated. And minor support is at 11.72.
12.50 is also a key level for today.
SPX:
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: 2,929.73
Minor level: 2,851.58
Major level: 2,812.50
Minor level: 2,773.45
Minor level: 2,695.35
Major level: 2,656.30
The S & P closed at 3,093.03. This put the S & P about 7 points above minor 3,085.95 level.
With a projected lower open this morning, look to see how the S & P reacts around the minor 3,085 level on a rally.
A move above it and it should be support and a break under it and it should be resistance.
3,076.20 is a support level.
QQQ:
Major level: 203.13
Minor level: 202.35
Minor level: 200.78 **
Major level: 200.00
Minor level: 199.22
Minor level: 197.77
Major level: 196.88
Minor level: 196.10
Minor level: 194.53
Major level: 193.75
Minor level: 192.19
Minor level: 189.06
The QQQ closed at 201.23. This was the first close above 200.78. Watch to see if this level holds. A close today above 200.78 and the QQQ should test 203.
The next minor level is 200.78. Watch to see if it clears this level and can close above it.
Technical support is still around 198. And there is a support line at 196.88
IWM:
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 159.08. The target for the IWM should be to the 162.50.
159.38 is a minor resistance level. The IWM needs to clear this level to move higher. Watch this level again today. If the IWM cannot clear it, it would signal we should see a pullback.
And 157.81 should still offer support.
And 156.25 should still be a major support level. And technical support is around 158.
TLT:
Major level: 143.75
Minor level: 142.97
Minor level: 141.41
Major level: 140.63
Minor level: 139.85
Minor level: 138.28
Major level: 137.50 <<
Minor level: 135.84
Minor level: 132.81
Major level: 131.25
The TLT closed at 134.91. The bond market is closed today for Veterans Day.
137.50 should be major resistance and minor resistance is at 135.94. With a second close under 135.84, the TLT should drop to around the 132 area.
The 138 area should offer technical resistance.
GLD:
Major level: 143.75
Minor level: 142.97
Minor level: 141.41
Major level: 140.63
Minor level: 139.85 **
Minor level: 138.28
Major level: 137.50
Minor level: 136.72
Minor level: 135.16
Major level: 134.38
The GLD closed at 137.39. With a break under 137.50, the GLD should continue lower.
The key level is 134.38. If the GLD has two closes under this level, it could drop to 125.
Watch this level today.
Technical resistance is around 141.
XLE:
Minor level: 63.28
Major level: 62.50
Minor level: 61.72
Minor level: 60.16 **
Major level: 59.38 < Hit
Minor level: 58.60
Minor level: 57.03
Major level: 56.25
Minor level: 55.86
Minor level: 55.08
Major level: 54.69
The XLE closed at 60.69. The objective should be to 62.50.
Having said that, the XLE needs to clear the midband, which is 61.37.
Technical support is still around the 60 area.
AAPL:
Major level: 281.25
Minor level: 277.35
Minor level: 269.54
Major level: 265.63 <
Minor level: 261.72
Minor level: 253.91 **
Major level: 250.00
Minor level: 246.88
Minor level: 240.63
Major level: 237.50
Minor level: 234.38
Minor level: 228.13
Major level: 225.00
Apple closed at 260.14. 265.63 should be the objective.
The 265.63 level should be resistance and I would not expect Apple to break above it, at least on this drive.
The upper band is 258.66. This should now be support until it closes under it.
250 should offer support.
WATCH LIST:
Bullish Stocks: GOOGL, GWW, WCG, COST, NTES, ADBE, AAPL, RTN, NVDA, VRTX, DXCM, BABA, CMI, HON, DE, UNP
Bearish Stocks: WAT, ANET, LOPE, BLUE, FANG, THS, ETSY, FIZZ, OXY, TRIP, OXY, WMB
Be sure to check earnings release dates.
