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
DIN Long December $40 call at $2.40
DIN Short December $45 call at $1.15
PANW Long Oct $145 Call at $2.44
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We are back to the same price action pattern we have experienced that seems to characterize this bull market.
That is a sharp move up off the swing low, followed by a series of narrow range trading days.
In this recent move that ran up to hit our 2,500 objective, it began on the 11th with a bullish gap and proceeded to follow through from there. The move since the low on the 8th, has been almost 50 points.
Since the bull gap on the 11th, the S & P 500 has averaged a range of 6.64 points per day. Even with those six narrow range days, the average true range stands at 12.73 points.
So for the last six days, the market has contracted to about 50% of the average true range. And this includes yesterday's range of 4.65 points.
I suggest that the recent action is because of the Fed announcement regarding interest rates today at 2:00 EST, but that does not account for the fact that this has been the pattern for sometime now.
So, does this suggest that we are set for another round of profit taking?
Perhaps. As this has been part of the pattern. A strong upmove off the pivot low, followed by a series of narrow range days that then a few days of profit taking.
At this point, I do feel that breaking 2,500 was a key event. And that a pullback would be an opportunity to get long.
But, at the moment we are the minor 2,509.78 line help assess us and tell us what the next minor move should be.
2,509.78 is the next confirming line. Confirming in the fact that if there are two closes above it, the objective should be raised to 2,529.33.
So, far the highest the S & P reached this week was yesterday's high at 2,508.32.
Yesterday's narrow range day also formed an inside bar.
So, the general expectation is for a range expansion after an inside bar. The question is which direction will this occur.
If the market pulls back, support should continue to be in the 2,484 to 2,487 range.
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 closed at 10.18, up .03 for the day. The objective should be back to a retest of 9.38.
Having said that, both the S & P 500 and the VIX closed to the upside yesterday, which is a divergence.
Watch to see if the VIX can hold the minor 10.16 level. On then upside, 10.74 should be resistance.
A minor support level is at 9.77.
$SPX:
Major level: 2,539.10
Minor level: 2,529.33
Minor level: 2,509.78 **
Major level: 2,500.00 < Hit!
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
2,509.78 is the next upside level. Two closes above 2,509.78 and the objective should be to 2,539.
2,500 to 2,502 should still offer support.
Minor support should be at 2,502.45. On the upside, 2,519.50 could offer resistance.
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 145.80. 150 should still be the active objective.
Minor support is at 145.51 & 145.31. Watch to see if the QQQ can hold 145.70.
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 143.38 again.
At this point, 142.97 should offer support. And clearing the 143.75 level should tell us the IWM will go higher. A failure to clear 143.75 and the IWM could bounce for a while.
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 125.81. The objective is to 125.
125.39 is minor support. Resistance is at 126.37. Could be volatile today with the FED announcement.
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 124.62, 40 cents above the 124.22 level. Two closes under 124.22 and the GLD should drop to 121.88.
125 should now be resistance. Watch the minor 124.61 level today.
XLE:
Major level: 68.76
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 66.39. The XLE still needs two closes above 66.41 to move up to 68.76.
Support should now be at 65.82. 66.80 is resistance.
The short term 60 minute chart has turned bullish. Short term momentum is to the upside.
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 86.17. The FXY hit the 85.94 objective. The low for the day was exactly 85.94.
85.94 is a major level. If the FXY closes for two days under 85.94, it could drop to 81. Did I mentioned that 85.94 is a key level?
For 85.94 to hold, it will need two closes above 86.33.
AAPL:
Major levels for Apple are 165.63, 162.50, 159.38, 156.25, 153.13, and 150.
Apple continues to bounce around, closing at 158.73. It continues to trade right around the 159.38 support level. I do feel that Apple will retest 162.50, but short term momentum has turned bearish, so it may pullback before that retest.
WATCH LIST:
Bullish Stocks: TSLA, BIDU, FDX, MMM, AMGN, SPZ, ALGN, LLL, RTN, NVDA, COST, CMI, SWK, ALXN, CME, CAT, RCL, UNP
Bearish Stocks: SBNY, PZZA, UBNT, DISH, MDLZ, MNK, RDUS, MDCO
Be sure to check earnings release dates.
