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
SNAP Long at $14.54
Total Premium Collected - $2.85
Short July 19th - $15.50 call @ $0.48
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
QCOM Long July 19th - $75.00 Call @ $0.95
QCOM Short July 19th - $78.00 Call @ $0.24
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I did suggest two positions yesterday. The first was the short term debit spread on QCOM and the second position was to sell calls against the SNAP position. The options on both of these positions expire next Friday.
This historic run keeps moving along. The S & P 500 closed 6.84 points higher yesterday. It closed 9 cents under the 3,000 level, at 2,999.91.
And for the second consecutive day, the high exceeded 3,000.
Yesterdays high was 3,002.33. I was looking for the S & P to clear the minor 3,002.90 level, but it did fall about 60 cents short.
Based on the pre market trading, this minor level should be taken out at the open. If this trading holds up until the open, I would expect support at the 3,002.90 level.
The projected open would also put the S & P within reach of the 3,007.85 upside confirming level.
This would be a key level to watch as one of two things could happen. The first is that the market has two closes above this level. And the second is that it offers resistance.
I should add that a third possibility exists and that is that the market has one close above and cannot close above it for two straight days.
At this point, the market is still strongly bullish, but with the VIX down to the long term major support level, we need to be aware that profit taking could set in.
The weekly price bar is trading 9.50 points higher. And the range so far is only 39.54 points. This is about one half of the weekly average true range, which through yesterday is 71.28 points.
The high of last week's weekly price bar is 2,995 and the close was 2,990. Both these levels should offer support on a pullback.
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
The VIX closed at 12.93 yesterday. The downside objective of 12.50 was hit yesterday.
The low for the day was 12.39.
So, at this point, the VIX is oversold and a possible bounce could happen.
This could happen if the 12.50 level holds as support.
14.06 should now be minor resistance, as well as 15.63.
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 << HIT
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
At this point, the S & P will need two closes above 3,007.85 to move up to 3,125.
The S & P did close above the minor 2,998 level, which should be support. And if this level holds, a move up to 3,095 is possible.
But, this will depend upon whether the VIX continues lower and rallies.
You should know the market implications for both scenarios, so I will not rehash it here.
QQQ:
Major level: 193.75
Minor level: 192.19
Minor level: 189.06 **
Major level: 187.50 < Hit
Minor level: 185.94 **
Minor level: 182.81
Major level: 181.25
Minor level: 179.69
Minor level: 176.56
Major level: 175.00
The QQQ closed at 192.42. The high came to within 41 cents of the 193.75 target.
Pre open, the QQQ is trading about 49 cents higher, so the target should be cleared at the open.
If the QQQ does clear 193.75, it would be a strong indication that it will head higher.
191.41 should offer 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 154.91. The IWM will still need two closes above 157.81 to confirm a move up to 162.50. But, the IWM has to clear 156.25 first.
At this point, the IWM is holding the midband, which is 154.31.
Short term trends remain bullish. So, buying against support is the best strategy.
Technical support is at 154.00.
TLT:
Major level: 134.38
Minor level: 133.60
Minor level: 132.03 **
Major level: 131.25
Minor level: 130.47
Minor level: 128.91
Major level: 128.13
Minor level: 127.74
Minor level: 126.95
Major level: 126.56
Minor level: 126.17
Minor level: 125.39
Major level: 125.00
The TLT continues to pull back from its overbought condition. It closed at 130.07 yesterday, down 1.76 on the day. A close today under 130.46 would imply a drop to 128.13.
131.25 is a minor resistance level now, as well as 130.47.
To move higher, the TLT will need to clear 132.81.
GLD:
Major level: 134.48
Minor level: 133.60 **
Minor level: 132.03
Major level: 131.25
Minor level: 130.47
Minor level: 128.91
Major level: 128.13
Minor level: 127.74
Minor level: 126.95
Major level: 126.56
Minor level: 126.17
Minor level: 125.39
Major level: 125.00
Minor level: 124.22
Minor level: 122.66
The GLD closed at 132.70. Watch the upper band, which is now 133.27. A retest is likely.
132.81 is a minor level the GLD has to clear to move higher. But, at this point, it is resistance.
132.40 is technical 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 64.17. The XLE should test 65.63.
63.28 should be support. And minor support is at 63.67.
64.84 is a minor resistance level. So, if it can clear 64.84, it should move up to 65.63.
Short term charts remain bullish.
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 201.75. Apple will still need two closes above 203.13 to move up to 212.50.
206.25 could offer some resistance, so if Apple clears this level, expect it to move higher.
200 should be support. Apple did break under the technical support at 202, which suggests a move down to 198 area.
Short term charts remain bullish.
WATCH LIST:
Bullish Stocks: NFLX, LMT, ADBE, FLT, MA, COST, APD, MLM, VRSN, MCD, HD, FB, OLED, HON, V, BABA, DIS, MSFT, WYNN
Bearish Stocks: RTN, USNA, SPR, KEX, NUS, DIS, TUP
Be sure to check earnings release dates.
