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
Total Premium Collected $0.75
DUST Long $4.50
Total Premium Collected $0.70
RRC Long at $11.85
Total Premium Collected $0.70
RRC Long at $9.20
RIG Long at $8.81
Premium Collected - $1.45
FEYE Long at $17.18
Total Premium Collected $0.80
CHKP Long August 16th - $110 call for $2.70
CHKP Short August 16th - $115 call for $0.60
DLTR Long August 16th - $102 call for $2.35
DLTR Short August 16th - $107 call for $0.40
XLNX Long September 20th - $110 call for $4.80
XLNX Short September 20th - $115 call for $2.70
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Friday, the S & P 500 had a strong push to the upside. It ended the day closing 41.08 points higher. It closed out the week at 2,888.68. And it closed out Friday at 83% of the range of its daily price bar.
This does suggest that Friday's high should be violated before its low.
And it should certainly be the case this morning because the S & P is trading about 27 points higher before the open.
Based on this pre market trading, the S & P should open around 2,915 or about 22 points above Friday's high.
The trading Friday and this morning once again show how powerful a selling climax can be to turn the market.
As I have been writing about, one selling climax has the ability to turn the market, but multiple selling climaxes should be more powerful. And it's not just the number of selling climaxes that can be predictive, but the amount of the down to up volume.
And Wednesday's down to up volume reading of 19.73 was the highest reading I have seen in a long time. Two days after that selling climax, the market has a strong up day.
Quite frankly, I would have preferred to see the bullish percent index have a reading under 20. Friday's reading came in at 46.60, so it is well above the oversold level.
A market where its bullish percent index is in the oversold territory is oil. The bullish percent index for the energy sector closed at 21.43 on Friday.
This is in oversold territory.
As you know, this is a contrarian indicator. When there is little interest in a market is usually when it bottoms out and starts to turn.
As an example, the bullish percent index for the S & P had a reading of 3.33 back in December of 2018. This was well below the oversold level and as it turned out, the December bottom was a major pivot point.
At this point, oil is the only market seriously oversold on its bullish percent index.
The weekly price bar for the S & P 500 closed 29.97 points lower. And it closed at 53.6% of the range.
The key support level from last week's weekly price bar is in the 2,884 area. 2,898 should also be a key area to watch.
The support area from Friday's daily price bar is in the 2,876 to 2,879 area.
Earnings contniue this week. CRM reports Thursday after the close.
Here are the Key Levels for the Markets:
$VIX:
Major level: 28.13
Minor level: 27.35
Minor level: 25.78
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
The VIX closed out Friday at 18.47. It closed Friday 2.71 points lower. This was a drop of 12.8%.
This now puts the VIX back under 18.75 and it should now be resistance. And two closes under 17.97 and the VIX should drop to 15.63.
17.19 is also a minor level to watch on the downside. A break under this level and the VIX should continue 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
Friday closed out at 2,888.68. This now suggests that if the S & P closes above 2,851.58 today, it should head up to 2,968.80.
2,880.90 should be a support level. 2,905 should also offer minor 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 185.48. 184.38 should offer support. And 182.81 should also be support.
Biased now for a move up to 187.50.
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 had a strong 2.16% move on Friday. It closed at 148.63, closing up 3.14 on the day.
Watch to see the IWM can clear 150. If it can, I would expect it to head higher.
146.88 should offer strong support.
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 146.13. The 143.75 level should offer support. If the TLT can close above 145.31 today, it should head up to 150.
Continues to trade above the upper band on the daily chart. The upper band is 141.47.
GLD:
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
Major level: 134.48
Minor level: 133.60
Minor level: 132.03
The GLD closed at 142.78. Watch the 143.75 level. It should still be resistance until it is violated.
Like the TLT, it is still above the upper band on the daily chart, which is 140.70.
140.63 is minor support.
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 57.02. The XLE will still need two closes above 57.03 to confirm a move up to 59.38.
If 56.25 should still be a major support level. And 56.64 is minor support. And 55.47 is minor support.
AAPL:
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
Minor level: 178.13
Major level: 175.00
Apple closed at 206.50. This now suggests that if Apple closes above 203.13, it should move up to 212.50. 206.25 should be support.
Apple is very close to crossing into an uptrend on its daily chart. Once this happens, it should continue higher.
WATCH LIST:
Bullish Stocks: MLM, MKC, CCI, VMC, LOPE, PG, FISV, SHAK, WELL, MPC, MMP
Bearish Stocks: BA, ILMN, ANTM, DPZ, BIIB, TSLA, MMM, AGN, FDX, JAZZ, FFIV
Be sure to check earnings release dates.
