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:
GOGO Long at $19.93
Total Premium Collected $1.95
ASNA Long at $14.20
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DUST Long $4.50
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RRC Long at $11.85
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RRC Long at $9.20
RIG Long at $8.81
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FEYE Long at $17.18
Total Premium Collected $0.80
XLNX Long September 20th - $110 call for $4.80
XLNX Short September 20th - $115 call for $2.70
FL Long Sept 13th -35.50 Put @ $0.90
FL Short Sept -13th - $33 Put for $0.30
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The market continued to bounce from the congestion area it has been in. It closed 38.22 points higher. It ended the day closing at 2,976.00.
The S & P 500 has now exceeded the upside target we had of 2,968.80.
Yesterday's high of 2,985.86 took the market 17 points above our objective. Even with late-day selling, the market still managed to close above the objective.
With a break above the major 2,968.80 level, the question now is where does the market go?
The first potential area for resistance should be the next upside confirming level, which is 3,007.85.
As you know, after a major level is taken out, the next minor level can offer resistance.
How the market reacts at the next level, which is 3,007.85, should tell us what to expect.
If the S & P can close above it for two days, then the next objective higher should be to 3,125.
If it offers resistance, I would not expect a drop to around 2,929.73.
At this point, I feel the odds do favor a move up to 3,125. It may not move straight up, but I do feel it will ultimately be hit.
The support area from yesterday's daily bar should be in the 2,968 to 2,973 area.
In looking at the weekly price bar, it has a range of 94 points. This is already greater than the weekly average true range, which is 81.84.
And yesterday's close is at 90% of the weekly price bar.
We should expect a close towards the upper end of the weekly price bar. The 50% level, so far is 2,939 and we would expect at least a close above it.
Pre open, the S & P is trading about 10 points higher.
I do want to mention that yesterday, both the TLT and the GLD broke under their respective upper bands on their daily charts.
This should now suggest that the upper band will be resistance.
But because both markets managed to trade above these levels, I would expect a rally after support is found.
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 17.27 yesterday. This was a further drop of 6.12%.
With a close under 17.97, this would suggest that the VIX should drop to 15.63.
A further drop would signify this move will continue higher.
18.75 and 17.97 should offer resistance.
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 2,976.00. At this point, 2,968.80 should offer support.
2,954 should offer support.
If the S & P can close for two days above 3,007.85, it should head up to 3,125.
With a break above 2,978, it should be support.
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 191.78. The next objective should be to 193.73 and 189.06 should be support.
190.93 is minor support.
187 should offer technical support.
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 150.59. The TLT hit the major 150 level we have been calling for.
Yesterday's high went to 151.91 of just above the next minor level, but could not hold it.
Two closes above 151.56 and the IWM should test 156.25.
146.88 should offer support on the downside.
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 144.76. The TLT broke under the upper band, which is 146.92. This should now be resistance.
If the TLT breaks under 143.75, it should head lower.
140.63 should be a support level.
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 143.14. Like the TLT, the GLD broke under the upper band the upper band on the daily chart. The upper band is now 145.20.
Two closes under 142.97 and the GLD should drop to 140.
142.19 is minor support.
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 58.72. Yesterday's high went to 59.37 or one cent under the objective. Close enough to say the target was hit.
58.20 should offer support on the downside.
The short term 30 minute chart has turned bullish, indicating momentum is shifting to the upside.
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 213.28. Apple took out the 212.50 objective we have been calling for.
The next minor level is 215.63. If the Apple can clear this level, watch for a move up to 218.75.
With both the 30 & 60 Minute charts in uptrends, continue to buy oversold conditions.
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.
