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.
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Friday closed out with the S & P 500 inching slightly higher. For the day, it was up .80 points. And it closed at 2,904.98.
This may not seem like a lot, but it did manage to close above the next upside confirming level, which is 2,902.83.
This now puts the active objective for the S & P 500 up to the 2,939.50 level.
I know this sounds rather remarkable, especially when you consider the fact that the S & P 500 bottomed at 1,810 back in February of 2,016.
This means the market has moved 1,106 points since that time. That is a move of 61%.
In looking at the market at this time, we know it is overbought, but when we still have higher objectives we need to stay long.
And with the VIX back down to long term support, we need to be mindful that a pullback could come.
But, the old adage at the moment is true. Don't fight the tape.
The other negative factor from Friday is that the range for the day was only 12.53 points. This was the third consecutive range contraction.
The daily average true range is now 18.66 points, so you can measure how much the day contracted.
Support from Friday's daily price bar is in the 2,902 to 2,906 range.
For the week, the S & P 500 closed 33.30 points higher. And the weekly range contracted as well.
The weekly average true range is 52.14, while the range was only 41.52 points.
Price did make a new high, as we expected after failing to take out last week's low.
The high for the week was 2,908.30, which exceeded last week's high of 2,900.18, by about 8 points.
Support from last week's weekly price bar is in the 2,887 to 2,893 area.
The other main issue at the moment is if 2,864 is the low for the month. This price was just above a monthly support level, which is 2,861.
Assuming the low is in, the market should make a run at 2,8016.50, which was last month high. And the monthly close percentage was 88%, which puts the odds around 88% to violate last month's high before the low.
Pre open, the S & P 500 is trading about 4 points lower.
Watch to see if the market holds support in this area on a pullback.
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 12.10. Friday was the second consecutive day where the VIX closed under the major 12.50 level.
Now the key will be the test of 11.72. At this point, it should be support. But, if the VIX takes it out, expect it to head lower.
12.50 and 12.89 should offer resistance.
SPX:
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
Minor level: 2,829.60
Minor level: 2,805.20
Major level: 2,793.00
The target is now to 2,939.50. But, there is resistance at 2,927.20.
Support should now be at 2,890 and at 2,902.
Short term intra day 30 and 60 minute charts are still bullish. Technical support is now around 2,884. This level should offer support.
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 183.99. Even though the QQQ was down slightly on the day, it did close above 182.81. This now puts the objective up to 187.50.
183.59 should offer minor support. I would not expect a close under this level.
Short term charts remain bullish. Technical support is at 183.10.
IWM:
Major level: 175.00
Minor level:174.22
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
The IWM closed at 171.38. The IWM did hit the 171.88 level. Friday's high was 171.93.
Minor support should be at 170.31. Technical support remains at 169.
TLT:
Major level: 123.44
Minor level: 123.05
Minor level: 122.27
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
The TLT closed at 118.55. To move higher now, the TLT will need two closes above 119.53. On the downside, the key level is 118.36. Two closed under this level and the TLT should drop to 117.19.
Resistance should be at 119.14. Clearing this level, the TLT should head higher.
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 113.02. Watch the 112.50 level. If this cannot hold as support, I would expect a further drop.
114.06 should be minor resistance.
The gold miner index (GDX) still remains under the lower band on the daily chart. Wait for a close back inside the bands before nibbling on the long side.
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 74.26. Yesterday's high came within 50 cents of the 75 level.
73.83 should offer minor support. If the XLE can clear 75, I would expect it to continue higher.
Short term momentum is shifting to the upside. But, technical resistance is at 74.60. The XLE will need to clear this level to move higher.
FXY:
Major level: 86.72
Minor level: 86.53
Minor level: 86.14
Major level: 85.94
Minor level: 85.75 **
Minor level: 85.36
Major level: 85.16 <
Minor level: 84.97
The FXY closed at 85.35. The FXY came within 10 cents of the major 85.16 level.
A break under 85.35 and the FXY should head lower. But, 85.35 is a strong short term support level. If it does hold, a bounce up to 86 is possible.
Short term charts remain bearish.
AAPL:
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 223.84. Apple managed to close back inside the upper band, which is 225.45.
I am not a big fan of shorting strong stocks, but Apple is in a situation where a short with a stop at the upper band maybe worth the risk. If the upper band holds as resistance, a drop to 217 could be the next minor move.
225 should be resistance.
WATCH LIST:
Bullish Stocks: AMZN, ALGN, NFLX, HUM, NVDA, ADBE, BA, PANW, QQQ, AET, HON, CRM, UNP, GRUB, ADSK, CHKP
Bearish Stocks: GS, MLM, LRCX, BLUE, CRI,WLK, CELG, FSLR, TRP, BIG, CLVS, ACM, X, HUN, CARS
Be sure to check earnings release dates.