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
TEVA Long at $9.78
TEVA Short Dec 20th - $10 Call - $0.26
SNAP Long Dec 20th - $14 call for $0.44
SNAP Short Dec 20th - $15 call for $0.11
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I suggested you close out the SNAP trade yesterday. In my haste to send out the alert, I did not fully disclose the results. The return for one night ended up being 45%.
Now back to the markets.
The market finally broke out and closed 26.94 points higher. The day closed out at 3,168.57.
And finally the market had an expansion that we have been looking for. The range for the day was 37.81 points.
This was certainly an expansion. The range was 172% of the daily average true range, which is now 21.97.
As I have written about in the past, when the market contracts, we can be assured that an expansion is coming.
In this case, there were 6 consecutive days where the daily range was less than the daily average true range. And on day 7, the market expanded.
The day closed out at 80% of the range of the daily bar. This suggests the market through follow through and take out yesterday's high before the low.
The support area from yesterday should be in the 3,155 to 3,157 area.
And the market had its first close above 3,164.08. This is the minor level above the major 3,125 level.
The weekly price bar so far has a range of 50 points, which is about 15 points below the weekly average true range.
The midpoint of the weekly bar so far is 3,151. A close above this level would certainly be bullish. The midpoint is within one point of last week's high, which should be strong support.
Pre open, the market is trading about 6 points higher. Watch to see if the
S & P can clear yesterday's high of 3,176.28. If it does move above it, I would expect support at that level.
ADBE reported and is trading about $8 higher.
Here are the Key Levels for the Markets:
$VIX:
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
Minor level: 11.72
Minor level: 10.16
Major level: 9.38
The VIX sold off and closed out the day at 13.94. The VIX sold off 7% yesterday.
Yesterday's drop put the VIX under the 14.85 level. This now suggests that if the VIX closes under 14.85 today, the VIX should drop to 12.50.
The 14.80 area should offer technical resistance.
SPX:
Major level: 3,281.20
Minor level: 3,242.15
Minor level: 3,164.08 ***
Major level: 3,125.00 < Hit
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
The S & P closed at 3,168.57. This put the S & P above 3,164.08. A close today above 3,164.08 and the S & P should move up to 3,281.
3,203 is minor resistance. And 3,125 should now be major support.
Technical support is around 3,140.
QQQ:
Major level: 209.39
Minor level: 208.61
Minor level: 207.04 ***
Major level: 206.25 HIT!
Minor level: 205.48
Minor level: 203.91
Major level: 203.13
Minor level: 202.35
Minor level: 200.78
Major level: 200.00
Minor level: 199.22
Minor level: 197.77
Major level: 196.88
The QQQ closed at 206.51. The QQQ hit the target of 206.25 we were looking for. And it closed above it for the first time.
The next minor level is 207.04. And 205.48 should offer strong support.
204 should offer technical support.
IWM:
Major level: 168.75
Minor level: 167.19
Minor level: 164.06
Major level: 162.50 Hit
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 163.96. The IWM will need two closes above 164.06 to move higher.
162.50 should offer strong support. Not only is it a resistance level, but it is a technical support level.
Short term charts remain bullish, so momentum is still bullish.
TLT:
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 HIT
Minor level: 135.84
Minor level: 132.81
Major level: 131.25
The TLT closed at 137.45. The TLT broke and hit the 137.50 level. Watch the minor 135.84 on the downside and the 138.28 level on the upside.
139 is technical resistance. And major support is at 137.50, so if the TLT moves under it, expect it to keep dropping.
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: 134.38
The GLD closed at 138.43. A break under 138.28 and the GLD should continue lower.
137.50 should be strong support. So if the GLD does break under it, I would expect it to head lower.
The key level is 134.38 on the downside. If the GLD has two closes under this level, it could drop to 125.
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 60.77. The XLE had its first close above the minor 60.16 level. A close above it today and the XLE should head up to 62.50.
At this point, the minor 60.16 level is the key level on the upside. Two closes above this level and it should head up to 62.50.
The XLE is literally sitting right at the midband on the daily chart. The midband is 60.99 and 60.97 was yesterday's high.
The XLE will of course, need to clear the midband to get higher. Pre open trading suggests this level should be taken out at the open.
AAPL:
Major level: 281.25
Minor level: 277.35
Minor level: 269.54 **
Major level: 265.63 HIT!
Minor level: 261.72
Minor level: 253.91
Major level: 250.00
Minor level: 246.88
Minor level: 240.63
Major level: 237.50
Apple closed at 271.46. 281.25 should be the objective for Apple.
And minor support should now be at 269.54. And technical support is around 268.
Needless to say that short term trends remain bullish.
WATCH LIST:
Bullish Stocks: CMG, SHOP, HUM, MLM, ZBRA, VRTX, BABA, CME, AMP, MSFT, HSY, UHS, KMB, ALNY, RCL, DRI, EA
Bearish Stocks: FDX, AAP, FFIV, XLNX, PLCE, CXS, SAGE, ALB, OLLI
Be sure to check earnings release dates.
