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.
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FEYE settled Friday exactly on our strike at $17. I am going to assume the calls were assigned and your stock was sold.
Friday closed out the month of September, as well as the week.
For the month, the S & P 500 closed 12.45 points higher. And it only had a range of 77 points. Compare with the monthly average true range, which is 119.86 points, you can see that we had a contraction for the month.
Also, the monthly bar formed a doji. This is where the close is approximately the open.
So, for the month, the S & P 500 had a narrow range doji. This tells us to expect an expansion.
And with a doji bar, you want to monitor the high, low and close.
Respectively, those levels are 2,940.91, 2,864.12 and 2,913.98.
You also want to monitor the midpoint, which is 2,902.52.
Is it possible that September's high could be the high for the year?
It is, but ponder this for a moment.
For the last 5 years, the S & P 500 made the annual high in December.
Six years ago, the high was made in September.
So, it is quite possible, but I think the odds of a high in December are a bit higher. At least it was for 5 out of the past 6 years.
For the week, the S & P 500 closed to the downside 15.69 points. And like the monthly bar, there was a contraction on the weekly bar.
The weekly range was only 27.87 points. And with a weekly average true range of 50.58 points, the range for the week was only 55% of the average.
And the weekly bar formed a narrow range inside bar.
This does tell us to expect an expansion.
And like the monthly bar, you want to monitor the high, low and close.
And respectively, those levels are 2,931.15, 2,903.28, and 2,913.98.
The midpoint is 2,917.22, which is also a level to watch.
Scaling down to the daily chart, we see that market closed essentially the same as Thursday.
Actually for the day, the S & P 500 closed two cents lower.
And the daily bar, like the monthly and the weekly charts, had a contraction. So, that makes two consecutive days of contractions.
The support level from Friday's daily bar is in the 2,912 to 2,914 area.
The major market wide announcement this week is the non farm payroll on Friday morning at 8:30 EST.
Pre open, the S & P 500 is trading about 16 points to the upside. This projects to an open around 2,930, which is above Friday's daily high and last week's high.
If the market continues to move up, watch the monthly high, which was 2,940.91.
Here are the Key Levels for the Markets:
$VIX:
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
Minor level: 7.81
Major level: 6.25
The VIX closed at 12.12. Yesterday was the second day the VIX closed under the major 12.50 level.
At this point, 14.06 should be resistance. If the VIX can close above 14.06 for two days, it would tell us that it should head higher.
12.11 is a minor support level. If the VIX breaks under 12.11, I would expect a drop to 10.94.
SPX:
Major level: 2,988.30 XXX
Minor level: 2,976.10
Minor level: 2.951.70
Major level: 2,939.50 <<
Minor level: 2,927.28 **
Minor level: 2,902.83
Major level: 2,890.60
Minor level: 2,878.40
Minor level: 2,854.00
Major level: 2,841.80
Minor resistance should be at 2,915. The market should open well above that level, and I would expect support at that level, if the market does sell off.
On the upside, resistance could be at 2,933.30 and 2,945.60.
The short term intra day 30 and 60 minute charts still remain bullish. Technical support is now around 2,903.
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
The QQQ closed at 185.79. 185.16 should be minor support. The objective should be up to 187.50.
184.38 should provide short term support as well.
The short term 30 minute chart has crossed into an uptrend. Technical support is at 183.42.
IWM:
Major level: 175.00
Minor level:174.22
Minor level: 172.66
Major level: 171.88
Minor level: 171.10
Minor level: 169.53
Major level: 168.75 <
Minor level: 167.97
Minor level: 166.41
Major level: 165.63
The IWM closed at 168.55. The key short term level is 167.97. And the IWM managed to recoup this level on Friday.
Support should be at 167.97.
The IWM is the only index still in downtrends on the 30 and 60 minute charts. Technical resistance is at 170.
TLT:
Major level: 121.88
Minor level: 121.10
Minor level: 119.53
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 reversed and closed at 117.27. This tells us that the TLT will still need two closes above 117.58 to move up to 118.75.
Minor support is at 116.99.
Short term charts remain bearish. Technical resistance is at 118.29. I would not expect a push higher without the 30 minute chart crossing into an uptrend.
GLD:
Major level: 117.19
Minor level: 116.80
Minor level: 116.02
Major level: 115.63
Minor level: 114.85
Minor level: 113.28 **
Major level: 112.50 <
Minor level: 111.72
Minor level: 110.16
Major level: 109.38
The GLD closed at 112.75. The GLD managed to close above the major 112.50 level.
The GLD will need to bounce up to the 116 area for me to consider that the downtrend is over.
Resistance should be at 114.06. Technical resistance is at 113.38.
XLE:
Major level: 78.13 <
Minor level: 77.35
Minor level: 75.78 **
Major level: 75.00
Minor level: 74.22
Minor level: 72.66
Major level: 71.88
Minor level: 71.10
Minor level: 69.53
Major level: 68.75
The XLE closed at 75.74. Watch to see if the XLE can regain the 75.78 level. If it can, I would expect the XLE to head higher.
75 should offer support. And 75.39 is minor support.
Both short term charts are in uptrends. Technical support is at 74.32.
FXY:
Minor level: 85.36
Major level: 85.16
Minor level: 84.97
Minor level: 84.58
Major level: 84.38
Minor level: 84.18 **
Minor level: 83.79
Major level: 83.59
The FXY reversed and closed at 84.15. This was the first close under 84.18. A close today under 84.18 and the FXY should drop to 83.59.
84.38 should be resistance now.
Short term charts remain bearish. Technical resistance is at 85.40.
AAPL:
Major level: 231.25
Minor level: 229.69
Minor level: 226.56
Major level: 225.00 <
Minor level: 223.44
Minor level: 220.31
Major level: 218.75
Minor level: 217.19
Minor level: 214.06
Major level: 212.50
Apple closed at 225.74. 223.44 should offer minor support. And minor resistance is at 228.13.
The 30 minute chart is still in a downtrend. Apple did clear the midband on the 30 minute chart. The midband is 222.55 and should offer support.
If the 30 minute chart can cross into an uptrend, I would expect it to head higher.
WATCH LIST:
Bullish Stocks: AMZN, REGN, ALGN, NFLX, BA, FLT, MA, ADBE, EW, ADP, V, ALXN, FANG, PTC, DIS, SQ, ESRX, XLNX, WBA
Bearish Stocks: FDX, GS, MLM, LRCX, WYNN, SMH, KLAC, ALL, ALNY, JACK, PRGO, MNST, KHC, WRK
Be sure to check earnings release dates.