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 Long November 15th - $57.70 call for $1.80
DVA Long November 15th - $55.00 put for $1.95
DVA Short November 8th - $61.50 call for $0.80
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Yesterday, I suggested you close out the MCD debit spread ahead of the Fed announcement. The return was just under 50% for a day. MCD continued higher after the announcement, so if you executed this trade later than when it was issued, you made more money. It is nice to get a better fill than expected.
I also suggested you sell a call against the DVA November 15th position. The idea behind selling options against the position is to help reduce the cost of the overall position.
The market reaction to the Fed announcement was rather tepid. This was probably because the market was expecting the outcome.
For the day, the S & P closed 9.91 higher. It closed out the day at 3,046.77.
The daily range was 24.14 points, which was almost the daily average true range. The daily ATR is now 26.42.
The daily average true range has been shrinking, which is usually not a good sign. And with the VIX back to its long term support level, a pullback would not be a shock.
Having said that, I do think a pullback would be a welcome opportunity to trade the run-up the 3,125 area. As you know, that is our active objective.
The S & P has already taken out last week's high, which was 3,027.39. This should be support at this time.
And yesterday's low was 3,025.96, which was about two points under last week's high.
Watch this level on a pullback.
Also, the support area from yesterday's daily bar is in the 3,038 to 3,043 area.
Pre open, the S & P is trading to the downside about 6 points lower.
Facebook reported last night and is trading about $8 higher. And Apple is up about $4 after reporting.
Western Digital is trading about $5 to the downside after reporting last night.
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 out at 12.32 yesterday. It was down 88 cents on the day and fell below the 12.50 target we were looking for.
The high for the day was just above the 13.28 level. It stalled out at 13.37 before dropping.
13.28 should still be resistance. The 11.72 level should be support. So, watch to see if this holds as support. A break under it and the VIX should head lower.
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
At this point, the objective for the S & P should be up to 3,125. The minor 3,027.30 level should still be support. And yesterday's low was just under it.
On the upside, the 3,051.80 level is minor resistance.
3,039 should offer technical support.
QQQ:
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
Major level: 187.50
Minor level: 185.94
The QQQ closed at 196.99.
The next minor level on the upside is 197.77. Two closes above this level and the objective should be to 200.
The 195 area should offer support. And technical support is around 196.
IWM:
Major level: 162.50
Minor level: 160.94
Minor level: 157.81
Major level: 156.25 Hit!
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 156.33. At this point, the IWM will need two closes above 157.81 to move up to 162.50.
154.69 should still be a support level. And technical support is around 155.
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 139.36. Watch to see if the TLT can clear 140.63. If it can, it should head higher.
138.67 should offer support. And the minor 138.28 level should as well.
The 138 area should offer technical support.
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 141.02. 139.84 is a minor support level. A break under 139.84 and the GLD should drop to 137.
Now that the GLD cleared 140.63, it should head higher.
The 140 area should offer technical support.
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 58.21. Watch for support at the 57.81 level. And a close today under 58.60 and the XLE should drop to 56.
58.59 should offer support on the downside.
Resistance is still at the midband on the daily chart, which is 61.50. It will have to clear this level to head higher.
Technical support is still around the 58 area.
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 243.26. Apple reported last night and is trading about $4 higher pre open.
Watch to see if Apple can clear 250. If it can't it should sell off.
WATCH LIST:
Bullish Stocks: GOOGL, ORLY, FLT, LRCS, AAPL, PANW, RH, CMI, UNP, KLAC, PSX, CELG, TIF,
Bearish Stocks: BA, LOGM, IRBT, RCI, CHL, CBS, NTGR
Be sure to check earnings release dates.
