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:
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MFA Long at $4.20
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PRA Long at $16.45
PRA Short Aug 21st - $17.50 call @ $0.40
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Yesterday, I suggested booking the profit on the CERN debit spread position. The result for a day shy of two weeks was a return of 115%.
The S & P continues this incredible bull run. For the day, the S & P closed 54.19 points higher.
The day closed out at 3,580.84. And yesterday's high was 3,588.11, which put the S & P
within 5.49 points of the objective I have called for.
The range for the day was 52.88 points. This certainly qualifies as a long-range candle, as the range was 153% of the daily average true range.
The daily average true range is 34.60 points and this was the first day that exceeded the average since last Thursday.
I know I may sound rather redundant mentioning the contractions. But, as I have said on a few occasions, these contractions ultimately lead to expansions.
In addition to the S & P being very close to the objective we have been calling for, it is also heading up to the upper band on the daily chart. The upper band is 3,683.47.
On the weekly chart, the upper band is 3,604.84.
So, the market is actually closer to the upper band on the weekly chart than the daily chart.
My projection is that if the S & P can clear the upper band on the weekly chart, then it should make a run to the upper band on the daily chart.
So, you want to watch how the market reacts around the 3,605 level.
The support area from yesterday's daily bar is in the 3,562 area.
And with the market closing at 86% of the range of the daily bar, the odds favor the high being violated before the low.
Pre open, the S & P is trading about 17 points lower. This would project to an open around 3,564.
This is about 2 points above the daily price bar support level. So, watch to see if it can hold. If it can't, a test of yesterday's low of 3,535.23 is possible.
CRWD reported last night and is trading about $14 lower.
This afternoon, after the close, we get earnings from AVGO, DOCU and RH.
Here are the Key Levels for the Markets:
$VIX:
Minor level: 32.03
Major level: 31.25
Minor level: 30.47
Minor level: 28.91
Major level: 28.13
Minor level: 27.35
Minor level: 25.78 **
Major level: 25.00 Midband
Minor level: 24.22
Minor level: 22.66
Major level: 21.88
Minor level: 21.10
Minor level: 19.53
Major level: 18.75
The VIX closed at 26.57. The VIX closed .45 points higher for the day.
This was the second day this week where the S & P and the VIX diverged. They diverged in the fact that they both closed higher on the day.
These are warnings to me that a reversal is coming.
The other fact is that we now have had two closes above 25.78 which suggests the VIX should head even higher.
And the VIX is above the midband on the daily chart, which is 25.37.
The VIX will have to break under the midband for a sustained move higher on the market.
S & P 500:
Major level: 3,593.60 <
Minor level: 3,554.55
Minor level: 3,476.45 **
Major level: 3,437.40
Minor level: 3,398.35
Minor level: 3,320.25
Major level: 3,281.20
Minor level: 3,242.15
Minor level: 3,164.00
Major level: 3,125.00
Minor level: 3,085.95
Minor level: 3,007.85
Major level: 2,968.80
The S & P closed at 3,580.84. The objective should still be up to the 3,593.60 level and the market is now within 5.50 points of it.
Watch for support at the 3,554.55 level. The market should open just above it, so watch to see if it can hold.
Technical support is also around 3,554.
QQQ:
Major level: 306.25
Minor level: 304.69
Minor level: 301.56 **
Major level: 300.00 < HIT
Minor level: 298.44
Minor level: 295.31
Major level: 293.75
Minor level: 292.19
Minor level: 289.06
Major level: 287.50
Minor level: 285.94
Minor level: 282.81
Major level: 281.25
Minor level: 279.69
The QQQ closed at 302.76. The QQQ closed 2.84 higher on the day. This put the QQQ above the minor 301.56 level.
A close today above this level and the QQQ should test 306.25.
The upper band, which is 295.25. With the QQQ above this level, it should be support.
Support should be at 300. And technical support is around 298.
IWM:
Major level: 162.50
Minor level: 160.94
Minor level: 157.81 **
Major level: 156.25 HIT
Minor level: 154.70
Minor level: 151.56
Major level: 150.00
Minor level: 148.44
Minor level: 145.31
Major level: 143.75
Minor level: 142.19
Minor level: 139.06
Major level: 137.50
Minor level: 135.94
The IWM closed at 158.46, closing 1.25 higher. This was the first close above 157.81. A close today above this level would suggest a move up to 162.50.
The 156.25 level should be support. Technical support is arouond 157.
TLT:
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 <
Minor level: 164.85
Minor level: 163.28
Major level: 162.50
Minor level: 161.72
Minor level: 160.16
Major level: 159.38
The TLT closed at 165.42, closing 1.56 higher. Watch to see if the TLT can hold the 163.28 level. If it can close above this level, it should test 165.63. And the TLT is right at this level.
The next higher level is 166.41. The TLT will need to close above this level to move higher.
Technical resistance is now around 167. Short term trends remain bearish. But, short term the TLT is oversold and bounce should be expected. And is bouncing as expected.
GLD:
Major level: 190.63
Minor level: 189.85
Minor level: 188.28
Major level: 187.50
Minor level: 186.72
Minor level: 185.16
Major level: 184.38 <
Minor level: 183.60 **
Minor level: 182.03
Major level: 181.25 <
Minor level: 180.47
Minor level: 178.91
Major level: 175.00
The GLD closed at 182.62 The GLD closed 2.43 lower on the day. This now suggests that if the GLD can close under 183.60 today, it should drop to 181.25.
Watch the minor 183.60 level. It should now be resistance.
The upper band is 192 and should now be resistance.
The 182 area should be a key technical support level. A break under this and the GLD should head lower.
XLE:
Minor level: 44.53
Major level: 43.75
Minor level: 42.97
Minor level: 41.41
Major level: 40.63
Minor level: 39.83
Minor level: 38.28
Major level: 37.50
Minor level: 36.72 **
Minor level: 35.15
Major level: 34.37 HIT
Minor level: 33.59
Minor level: 32.03
Major level: 31.25
The XLE closed at 35.24. The objective should be down to 34.37.
Watch to see if the XLE can hold the 34.37 level.
Watch the minor 35.15 level today. If the XLE can hold it, it should head higher.
Technical resistance is still at 37. I do expect a short term bounce.
AAPL:
Major level: 150.00
Minor level: 146.88
Minor level: 140.63
Major level: 137.50 <
Minor level: 134.38 **
Minor level: 128.13
Major level: 125.00
Minor level: 121.88
Minor level: 115.63
Major level: 112.50
Minor level: 109.13
Apple closed at 131.40. Apple closed 2.78 lower. A close today under 134.38 and Apple should drop to 125.
The upper band is 122 and should be support. Apple is still $9 above it.
128 should be technical support.
WATCH LIST:
Bullish Stocks: AMZN, TSLA, GOOGL, NVDA, AAPL, NTES, LULU, MA, COST, INTU, AVGO, RH, ZM, FB, BABA, HD, CRM, WDAY, V, MSFT, DE, KLAC, PYP:
Bearish Stocks: BDX, MLM, ATO, ES, DUK, AEP, EHTH, CMS, WUBA, HES, KEX
