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.
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YUM Long September 27th - $112 call for $1.65
YUM Short September 27th - $115 call for $0.46
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The market has been quiet ahead of the Fed announcement at 2:00 EST. It is expected that the Fed will lower rates another 1/4 point.
Yesterday the market closed 7.72 points higher. It closed out the day at 3,005.68.
This put the market back to within 2 points of the 3,007.85 level. But again, the market had a narrow range day.
The range for the day was only 12.48 points. This is still well under the daily average true range, which is now 30.47.
The S & P has not exceeded the daily average true range since the long range bearish day on August 23rd.
Perhaps with the announcement today, we will see an expansion. We know one is coming. It is inevitable after all these contractions.
The market is holding above the weekly support area. Last week's support from the weekly price bar is in the 2,989 to 2,998 area. And yesterday's low went to 2,993.73, which is virtually in the middle of the range. The actual midpoint of the range is 2,993.50.
Now that the S & P closed above it, I would expect 2,998 to act as support.
The support area from yesterday's daily price bar is around 3,000. So, there should be strong support around the 2,998 to 3,000 area.
As always, if the market breaks under this area, it would then be resistance.
Pre open, the S & P is trading about 5 points lower. This would put the open right around 3,000.
ADBE reported last night it is down about $8. FDX also reported and down around 10%. Dollarwise, this is a drop of about $19.
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 14.41 yesterday. The VIX should drop to 12.50.
And the minor 14.85 level should still act as resistance. The VIX got as high as 15.03 yesterday before closing under 14.85.
Look for support at 14.06. And support is at 13.28.
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 closed at 3,005.70, or about 2 points under the 3,007.85. Watch to see if the S & P can clear this level.
Minor support is at 2,998 and 2,992.
Short term trends remain bullish. Look for technical support around 2,994.
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 192.60. The QQQ did reclaim the minor 192.19 level. This should still be support.
Technical support should be around 189.
191.80 should be a short term support level. And 191.41 should offer support as well.
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 157.49. The IWM will still need two closes above 157.81 to test 162.50.
159.38 is a minor resistance level. If the IWM clears this level, look for a move higher.
156.25 should be support. And technical support should be at 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 139.03. The TLT should test 140.63.
137.50 should be support. If the TLT can move above 139.06, it should head higher, most likely up to 140.63.
Technical resistance is around 141.
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 141.60. A close today above 141.41 and the GLD should move up to 143.75.
140.63 should be support. And minor support should be at 141.41.
XLE:
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
Minor level: 58.60
Minor level: 57.03
Major level: 56.25
The XLE closed at 62.25. The XLE did take out the 62.50 objective. The next level on the upside is 63.28.
Two closes above 63.28 and the XLE should test 65.63. And on the downside, the key level is 61.72. Two closes under 61.72 and the XLE should test 59.38.
With all short term trends bullish, look to buy at support. Technical support is around 61.
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 220.70. At this point, the major 212.50 level should offer strong support.
218.75 should be a short term support level.
219 is technical support.
WATCH LIST:
Bullish Stocks: LMT, GOOGL, MLM, ASML, LRCX, HD, AAPL, BABA, RH, DE, CMI, ITW, UTX, ZBH
Bearish Stocks: REGN, HUM, SQ, GDOT
Be sure to check earnings release dates.
