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
DYN Long at $12.55
Premium Collected $0.48
APA Long Oct $47.50 Call at $3.45
SNAP Long at $15.20
Short Sept 15th - $15.50 call at $0.28
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The S & P 500 broke out and closed up 26.68 points on the day. It closed at 2,488.11, within 12 points of the objective I have been calling for. As you know, 2,500 has been the target and continues to be the target.
The range for the day was only 14.43 points. How can this be when the market closed up almost 27 points on the day?
Of course, the answer is the bullish gap at the open. The S & P 500 opened 13.59 to upside.
So, the bullish gap was almost the same range as the intra day range. I bring this up because to capture the entire move you would have had to be long on Friday.
For day traders, going long into the weekend would be a difficult trade to make. Especially with a major hurricane bearing down on Florida and the entire south east United States.
And then there is the nuclear threat out of North Korea. All this negative news makes you concerned about being long over a weekend. And then you add in the fact that the markets are at all time highs.
Then the market opens Mondays and screams up to news highs. Doesn't make much sense, does it?
This is where our resistance levels can help to sought out some logic to the markets.
I look at these levels as a rejection system. What does that mean?
The criteria I use for the next upside objective to become an active target is two daily closes above the confirming level.
For the major 2,500 level to become active, the S & P 500 would need two closes above 2,453.12. This has happened twice now.
And what is interesting about the 2,453.12 level is that it did close above it on June 19th. However, the next day it closed back under it and that began a pullback of about 50 points.
You may ask why are there levels between the major 2,500 and 2,437.50 levels?
The answer is that there are smaller levels between the major levels. This is similar to looking at a monthly chart versus a daily chart.
The difficult analysis is always trying to integrate the longer term analysis with the shorter term analysis.
But, if we go back and view this move based strictly on price action, we know that typically a big move follows an inside bar.
And last week, the S & P 500 formed an inside bar on the weekly chart and now we are breaking out.
The million dollar question now is what happens at 2,500?
I will delve into that more more it arrives.
Continue to follow the resistance levels.
Here are the Key Levels for the Markets:
$VIX:
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 <
Minor level: 8.60
Minor level: 7.03
Major level: 6.25
The VIX dropped 1.38 points and closed at 10.73. This was a drop of 11.47%.
9.38 should be the objective. And this is a key level as you know. This level has acted as support for a long time.
7.81 should be short term support.
$SPX:
Minor level: 2,509.78
Major level: 2,500.00
Minor level: 2,492.20
Minor level: 2,476.00 <
Major level: 2,468.80
Minor level: 2,460.98
Minor level: 2,445.33
Major level: 2,437.50
The objective should still be to 2,500. 2,476 should offer support.
And 2,468.80 should continue to offer support on a deeper pullback.
QQQ:
Major level: 150.00
Minor level: 148.44
Minor level: 145.31 ***
Major level: 143.75 <
Minor level: 142.18
Minor level: 139.06
Major level: 137.50
Minor level: 135.94
Minor level: 132.81
The QQQ closed at 145.87. A close today above 145.31 implies a move up to 150.
Support should be at 145.31 nd 144.92.
IWM:
Minor level: 144.53
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: 135.15
Major level: 134.37
The IWM closed at 140.68. Objective hit. Minor support is now at 139.84 and 139.06.
On the upside, 141.41 could offer resistance.
TLT:
Major level: 131.25
Major level: 130.47
Minor level: 128.91
Major level: 128.13
Minor level: 127.35
Minor level: 125.78
Major level: 125.00
The TLT closed at 127.46. 128.13 should offer resistance and 125 support.
126.56 is minor support.
GLD:
Major level: 131.25
Minor level: 130.47
Minor level: 128.91
Major level: 128.13
Minor level: 127.35
Minor level: 125.78 **
Major level: 125.00 <
Minor level: 124.22 **
Minor level: 122.66
Major level: 121.88
Minor level: 120.32
The GLD closed at 126.19. A close under 127.35 today and the GLD should drop to 125.
Minor support is at 125.78.
XLE:
Minor level: 67.97
Minor level: 66.41
Major level: 65.63
Minor level: 64.85
Minor level: 63.28
Major level: 62.50 <<
Minor level: 61.72 **
Minor level: 60.16
Major level: 59.38
The XLE closed at 65.01. 65.63 should be the objective. If the XLE cannot close above 65.63 for two days, it could drop severely.
64.85 is minor support.
FXY:
Major level: 89.06
Minor level: 88.67
Minor level: 87.89
Major level: 87.50 <
Minor level: 87.11 **
Minor level: 86.33
Major level: 85.94
Minor level: 85.55
Minor level: 84.77
Major level: 84.38
The FXY closed at 87.78. This is just 28 cents above the major 87.50 support level.
If the FXY breaks under 87.50, watch the 87.11 level. Two closed under 87.11 and the FXY should drop to 85.94. 85.94 should be major support.
AAPL:
Major levels for Apple are 165.63, 162.50, 159.38, 156.25, 153.13, and 150.
Apple bounced and closed at 161.50. Today is the release of the new iphone and pre market Apple is trading to the upside.
Minor support should be at 159.38 and 160.16.
WATCH LIST:
Bullish Stocks: BIIB, BIDU, ILMN, WAT, ALGN, AET, ADBE, SAFM, ADSK, CHKP, PLCE, EL, HSY, DPS, CERN, SPLK, BAX, LVS
Bearish Stocks: TAP, ALK, PZZA, THS, DFS, QCOM, AMBA, SAVE, CNK
Be sure to check earnings release dates.