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.
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WDC Long October 25th - $58.50 put for $0.95
WDC Short October 25th - $56.00 put for $0.27
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The S & P 500 pulled back slightly yesterday. For the day, it ended up closing 10.73 points lower. It closed out at 2,995.99.
The market managed to move above the minor 3,007.85 level, hitting a high of 3,014.57, but it could not hold it.
After topping out, the S & P dropped to a low of 2,995.04.
So, for the day, the S & P made a new high and a new low. And it closed right around the low for Monday, which was 2,995.35.
Technically, this is an outside day, which is something the market has not seen in a long time.
An outside day is when the market makes a new high and a new low, but does not close under the prior day low or above the high. When this happens, I consider it a key reversal day, which is slightly stronger than an outside day.
The day closed out at 5% of the daily price bar, which does suggest that the odds favor yesterday's low will be violated before the high.
And the resistance level should be in the 3,003 to 3,005 area.
The range for the day was 19.53, which was only 64% of the daily average true range. The daily average true range is now 30.50 points.
Even though yesterday's price action was bearish, the conviction was not strong.
With a back under the 3,007.85 level, it should still be resistance.
The support area from last week's weekly price bar is in the 2,976 to 2,985 area. Watch this area on a sell-off.
CMG reported last night and is down about $17 pre open. BA reported and is trading about $4 to the upside.
This afternoon, we get earnings from LRCX, MSFT, PYPL, and TSLA.
Pre open, the S & P 500 is trading about 5 points lower.
Here are the Key Levels for the Markets:
$VIX:
Major level: 25.00
Minor level: 24.22
Minor level: 22.66
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
The VIX closed at 14.46 yesterday. The minor 13.28 level should offer support.
Resistance should still be at 15.63. And the minor 14.06 level should be support. A break under it and it should be resistance.
The VIX is oversold.
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 2,995.99. At this point, the S & P will need two closes above 3,007.85 to move up to 3,125. As I mentioned above, this should still be resistance until it is cleared.
With a projected open under 3,002.90, watch for resistance at that level.
On the downside, the 2,978.50 level should offer support.
QQQ:
Major level: 196.88
Minor level: 196.10
Minor level: 194.53
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
The QQQ closed at 191.85. The QQQ will need two closes above 194.53 to move up to 196.88. The QQQ could not hold 192.19, so a close today under 192.19 and the QQQ should drop to 187.
189.06 is a minor support level.
Technical support is around 191.
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 154.21. The objective for the IWM should be for a move up to 156.25. But, the IWM needs to clear 154.69 to move higher.
153.13 should be a support level. And technical support is around 152.
TLT:
Major level: 150.00
Minor level: 148.44
Minor level: 145.31
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
The TLT closed at 139.34. 139.85 should be resistance until it is violated.
The TLT broke under short term 139. This is a short term support level. At this point, it should now be resistance.
GLD:
Major level: 150.00
Minor level: 148.44
Minor level: 145.31
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
The GLD closed at 140.20. With the GLD reclaiming 139.85, it will still need two closes under 139.85 to move lower. The GLD will need to reclaim 140.63 to move higher.
137.50 should offer strong support.
Technical resistance should be in the 140 area. And technical support is in the 139 area.
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 58.80. The XLE hit the 59.38 level, with a high of 59.47.
The XLE will need to clear this level to head higher. And 56.25 should still be support.
The XLE is actually close to crossing into an uptrend on its daily chart. This would be a major event and indicate higher prices to follow.
AAPL:
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
Minor level: 221.88
Minor level: 215.63
Major level: 212.50
Minor level: 209.38
Apple closed at 239.96. The next minor level on the upside is 240.63. Two closes above this level would suggest a move up to 250. So, at this point, Apple will need to reclaim the 240.63 level.
Technical support is around the 237 level.
Short term charts remain bullish. Buying against support is still the best strategy.
WATCH LIST:
Bullish Stocks: GOOGL, CHTR, SPY, CTAS, HD, AAPL, PANW, NVDA, FB, DE, AGN, CMI, DG, UTX, CAT
Bearish Stocks: BA, BIIB, FANG, XOM, CXO, TXRH, XEC, CLR, PSQ
Be sure to check earnings release dates.