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
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DUST Long $4.50
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RRC Long at $11.85
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RRC Long at $9.20
RIG Long at $8.81
Premium Collected - $1.45
FEYE Long at $17.18
Total Premium Collected $0.80
XLNX Long September 20th - $110 call for $4.80
XLNX Short September 20th - $115 call for $2.70
FL Long Sept 13th -35.50 Put @ $0.90
FL Short Sept -13th - $33 Put for $0.30
MA Long Sept 20th - $272.50 Call for $5.30
MA Short September 20th - $277.50 Call for $3.05
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The market continued the push up as we expected. For the day, the S & P 500 closed 21.54 points higher.
It closed the day at 3,000.93.
So, the market it ticking up to the next upside confirming line, which is 3,007.85. This is the next minor level to watch because two closes above it and the objective to the upside should be to 3,125.00.
The market is now within 8 points of this level.
I have been writing about the fact that further upside movement would be expected if the 60 minute chart crossed into an uptrend. And that is what happened yesterday.
We now have both the 30 minute and 60 minute charts in uptrends. This tells us to buy oversold conditions off the short term charts.
The support area from yesterday's daily price bar is in the 2,988 to 2,991 area.
And the daily bar closed at 100% of the range, which tells us the high should be violated.
This should happen right at the open as the S & P is trading about 5 points higher pre open.
Yesterday's high of 3,000.93, which was also the close, should offer support on a pullback.
The market I have been writing about recently is the IWM. And I would like to make a few comments.
As I said, from a technical standpoint, the IWM crossed into an uptrend around August 29th. And with the weekly chart in an uptrend, this suggests it should head higher.
Which is what it is doing. And the IWM had been trading under the midband on the daily chart, so it needed to clear it to move higher as well.
And that it's what it recently did. Three days ago, the high for the IWM was sitting just under the midband. And in two days, it has now run from 151.91 to 157.
The question is what is driving this?
The IWM has been the laggard of all the major markets, as you know.
The question now is how far can this move go?
I think the key level for the IWM is 156.25. And yesterday was the first close above it.
If the IWM can close above it again, it sets ups a few price expectations.
The first would be that the major 150 level would be strong support. And if the IWM closed above 156.25 again, that level should also be strong support.
And the upside objective could be as high as 175.
The IWM is very close to crossing into an uptrend on its 60 minute chart. So, if it can cross up, this will also suggest it will head higher.
Quite frankly, I don't think this move is that irrational.
If you want to see what irrational moves look like, you only have to check out the daily charts of the TLT and the GLD.
And these irrational moves usually don't end well when people come late to the party.
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 14.61 yesterday. This was the first close under 14.85. A close today under 14.85 and the VIX should drop to 12.50.
14.06 is a minor support level. If the VIX breaks under it, it should head lower. 16.41 should continue to be minor resistance.
And 15.63 should now be resistance as well.
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 500 closed at 3,000.93. As you know, two closes above 3,007.85 and the S & P should head up to 3,125.
2,978.50 should offer support. And watch for support at the minor 2,995.60 level.
Technical support should be around 2,970.
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 192.43. 193.75 should be the objective.
190.63 should offer short term support. And yesterday's low was right at it.
If the QQQ can move above 192.19, it should offer support.
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 157. The IWM took out the 156.25 level. And it should now be support.
Two closes above 157.81 and the IWM should head up to 162.50.
153.13 should offer support. And 150 should offer strong support.
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 Hit
Minor level: 139.85
Minor level: 138.28
Major level: 137.50
The TLT closed at 140.44. Yesterday's low took out the objective by 20 cents.
The TLT has now dropped three levels off the top. It could bounce up to around 144 and possibly to 147.
Major support should be at 137.50.
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 141.03. The GLD did take out the major 140.62 level and managed to close above it.
Now it will need two closes above 141.41 to head up to 143.75.
140.63 should now offer support.
XLE:
Minor level: 63.28
Major level: 62.50 <
Minor level: 61.72
Minor level: 60.16 **
Major level: 59.38
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 60.98. The objective for the XLE should be up to 62.50.
60.16 should offer minor support. If the XLE can clear 60.94, it should move up to 61.72. And yesterday's high was 61.74. The XLE needs to get above 61.72 to move higher.
59.38 should offer support on the downside.
The short term 30 minute chart has turned bullish indicating momentum is shifting to the upside. And the 60 minute chart continues to move closer to an uptrend.
AAPL:
Major level: 225.00
Minor level: 221.88
Minor level: 215.63 **
Major level: 212.50 <
Minor level: 209.38 **
Minor level: 203.13
Major level: 200.00
Minor level: 196.88
Minor level: 190.63
Major level: 187.50
Minor level: 184.38
Apple closed at 223.59. Target is to 225.
221.88 should offer support.
With both the 30 & 60 minute charts in uptrends, continue to buy oversold conditions.
Apple is overbought in the short term. A pullback would be a welcomed opportunity to go long.
WATCH LIST:
Bullish Stocks: LMT, COST, FLT, MA, NTES, BDX, MLM, HD, LRCX, CME, AAPL, BABA, GPN, CB, KLAC, VMC, DLR
Bearish Stocks: HUM, NFLX, JAZZ, ALXN, FANG, CNC, MDP, YELP, ALKS
Be sure to check earnings release dates.
