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
Total Premium Collected - $1.65
OI Long Feb $19 call @ $1.70
OI Short Feb $22 call @ $0.55
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Yesterday I suggested another long term debit spread on OI. The February's calls should give us enough time for the trade.
After closing higher on Monday, the market was relatively flat yesterday.
For the day, the S & P 500 closed 1.16 points lower at 2,923.43.
And the range for the day was only 12.05 points, compared with the average true range of 18.16 points.
So, the market contracted yesterday and formed an inside bar as well.
This tells us to expect an expansion.
And for the inside day, you want to monitor the high, low and close. those prices are 2,931.42, 2,919.37, and 2,923.43, respectively.
The other support levels to monitor from yesterday are the 2,923 to 2,925 area.
With the inside day, price will usually continue to move in the direction of the violation of the high or the low.
Pre open, the S & P 500 is trading about 9 points higher. This projects an open, assuming this level holds, to an open just above yesterday's high.
If the market does pullback, look for support at the close.
The major market that continues to laggard is the IWM.
It is approaching the major 162.50 level. Watch to see if the IWM holds support at this level.
Watch the levels I mentioned above.
Also, strong support should be at 2,902.52, not only because it is the midpoint of the monthly bar, but it right at the 2,902.83 level.
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 12.05. It continues to trade just under 12.50.
The bias for the market is still to the upside, because as I have been saying, I would not expect the VIX to move higher until it can close back above 12.50.
With a close under 12.11, a close today under this level and the VIX should drop to 10.94.
12.50 should still be resistance.
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
Yesterday's low was 2,919.37, which was just under the minor 2,919.90 level. This level should continue to offer support.
On the upside, watch the minor 2,932.10 level.
Based on how the market is trading pre open, it should open right at this level.
This should indicate that short term support should be at 2,926 to 2,929. Watch this area if the market does pullback.
The short term intra day 30 and 60 minute charts still remain bullish. Technical support is now around 2,905.
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 185.75. The QQQ closed under the minor 185.94. Look for the market to recoup this level today.
184.38 and 185.16 should provide short term support.
Both 30 minute chart and the 60 minute charts are bullish. Technical support is at 184.50.
IWM:
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
Minor level: 164.85 **
Minor level: 163.28
Major level: 162.50
The IWM closed at 164.53. We got the test of 165.63, as expected and the IWM failed to hold at that level.
This now sets up a scenario where if the IWM closes under 164.85 today, it should test 162.50.
164.06 is a minor level. A break under this level and the IWM should continue lower.
The IWM is the only index still in downtrends on the 30 and 60 minute charts. Technical resistance is at 167.
The IWM is still trading under the lower band on the 30 minute chart, indicating how oversold the market is.
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 closed at 116.86. It closed above the high of the climax day from Monday, which indicates to me that a short term bottom should be in.
The TLT still closed under 117.19, so this bounce should be short lived.
I don't see this rally moving past 118.75.
Short term charts remain bearish. Technical resistance is at 118. I would not expect a push higher without the 30 minute chart crossing into an uptrend. Having said that, the 30 minute is trying to cross 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 113.87. A close today above 113.28 and the TLT should test 115.63.
The GLD will need to bounce up to the 116 area for me to consider that the downtrend is over.
Minor resistance should be at 114.06.
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 76.87. A close today above 75.78 and I would expect a test of 78.13.
75.78 should offer minor support.
Both short term charts are in uptrends. Technical support is at 75.
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 closed at 84.18. The FXY held above the minor 83.59 level and is now bouncing.
A move up to the 84.77 should be expected. A higher move may indicate a swing bottom is in place.
85.16 should be resistance now.
Short term charts remain bearish. Technical resistance is right at 85.19, along with the resistance level.
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 229.28. 231.25 should be tested. If Apple takes out 231.25, it should head higher.
The 30 minute chart has crossed into an uptrend. This does suggest higher prices for Apple. Buy the next oversold condition.
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.
