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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Friday traded higher than the long-range candle from the prior Friday.
The high for Friday was 2,940.43 and for last Friday, it was 2,930.50. So, you can see that high cleared last Friday by about 10 points.
But, it turned out that the market could not close above the high. The S & P 500 closed at 2,926.46 or about 4 points under that high.
Quite frankly, I would have preferred a close above the high. That would have been bullish.
But, Friday still traded above the high, so the midpoint of that long-range candle should now be support. As a reminder, the midpoint of the long-range candle is 2,880.99.
A retest from above would not be out of the question.
And with Friday closing at only 48% of the daily bar, there is no bias to the upside.
In scoping out to the weekly price bar, we see that it closed 79.34 points higher. And it reversed the prior two bearish closes, which is bullish.
The weekly bar closed at 84% of the weekly price bar, which does suggest that the high should be violated before the low.
The support area from last week's weekly price bar is in the 2,896 area.
The weekly range was 87.38 points, which exceeded the weekly average true range of 80.94.
So, we should see weakness early in the week, followed by strength.
Friday also closed out the monthly price bar for August.
The monthly bar price closed out 54% of the bar. This is relatively neutral. The range for the month for 191 points as compared with the monthly average true range of 165 points.
The support level from the monthly price bar is in the 2,918 area.
If this area cannot hold, the next support level should be around 2,895.
I also want to point out that the upper band on the monthly chart is now 2,941. So, Friday's close of 2,926.46 was about 15 points below it.
Watch the upper band of 2,941.
I also want to point out that the 30 minute chart for the S & P is bullish, but the 60 minute chart is bearish.
This does suggest that short term momentum is shifting to the upside. And 2,894 is the midband on the 30 minute chart, which should offer support.
But, the 60 minute chart is still bearish. And price is trading under the midband, which is 2,940. This level is still resistance until it is violated.
If the 60 minute chart can cross into an uptrend, the market should continue higher.
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 18.80 on Friday. The VIX closed 5 cents above the major 18.75 level.
17.97 should now offer minor support. To move up to 21.88, the VIX will need two closes above 19.53.
If the VIX cannot hold 17.97, I would expect a drop lower.
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 2,926.46 on Friday. The objective at this point should still be up to the 2,968 level.
2,851.58 should offer minor support. There is also short term support at 2,905.30.
Pre open, the S & P is trading about 17 points lower. Based on this trading, the S & P should open around 2,909.
Watch to see if the S & P can hold the minor 2,905 level.
Minor support is at 2905.30 and yesterday's low was 2,905.67.
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 187.47. The QQQ got as high as 188.97 before closing 3 cents under the major 187.50 level.
Support should be at 185.94. A break under this level and the QQQ shold head lower. And technical support is at 185.64.
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 148.84. Yesterday's high came to within 3 cents of the 150 objective we have been looking for, close enough to say it was hit.
This should be support after the IWM clears it.
148.44 is minor support. A break under this level and the IWM should head lower.
The IWM did manage to cross into an uptrend on the daily chart.
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
Minor level: 139.85
Minor level: 138.28
Major level: 137.50
The TLT closed at 147.28. The TLT is still above the upper band on the daily chart, which is 145.93.
146.09 is minor support. And also at 146.88.
147.66 is a minor resistance on the upside.
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 143.75, exactly on the major level. The GLD will still need two closes above 145.31 to head up to 150.
The GLD is below the upper band on the dialy chart. The upper band is now 144.12. And Friday closed just under it.
A break under 143.75 and support should be at 140.63.
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 57.48. It was flat for the day. The objective for the XLE should be to 59.38.
57.03 should offer minor support.
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 208.74. 206.25 should still offer strong support.
And the objective for Apple should be to 212.50.
Ultimately, the target should be to 225.
The 30 minute chart is bullish and support should be around 205. And the 60 minute chart is close to crossing into an uptrend as well.
WATCH LIST:
Bullish Stocks: GOOGL, LMT, FLT, HD, CME, LRCX, AAPL, ADP, ROKU, KLAC, UPS, SBUX, AKAM, DNKN
Bearish Stocks: HUM, DPZ, BIIB, IRBT, BG, GOOS, GDOT, HLF, TDC, JNPR, CROX
Be sure to check earnings release dates.