While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to 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.
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VIPS Long @ $17.19 Short March 9th - $17.50 call @ $1.65 ..........................................................................................
The market followed through yesterday from the reversal on Friday. For the day, the S & P 500 closed at 2,720.94, up 29.69 points for the day. The range for the day was 52.34 points.
The range was greater than the average true range, which is now 46.01. Buying is coming back into the market after the shake out.
As I mentioned yesterday, with the price on the 10 minue chart for the S & P 500 under the lower extreme bollinger band and the 30 minute chart in an uptrend, this usually signifies a buy.
What I did not mention yesterday is that the price objective off this set up is back to the midband on the 10 minute chart.
And yesterday, the S & P 500 hit that objective.
The midband on the 10 minute chart is 2,727 and yesterday's high was 2,728.09. After hitting the midband, the market pulled back slightly to close at 2,720.94.
I will show this set up on tomorrow's webinar. And speaking of tomorrow's webinar, please email me at davismdt@gmail.com if you have someone you would like me to review.
Pre open, the S & P 500 is trading about 12 points to the upside. This would put the open at around 2,733. Based on an open around the price where the market is currently trading, price would open above the midband on the 10 minute chart. This would mean that the midband should offer support on a pullback.
Also, the major 2,695.35 level should continue to offer support if the market does pullback.
And based on yesterday's daily price bar, support should be in the 2,702 area.
Here are the Key Levels for the Markets:
$VIX:
Major level: 31.25
Minor level: 29.69
Minor level: 26.56
Major level: 25.00
Minor level: 23.44
Minor level: 20.31 **
Major level: 18.75 <
Minor level: 17.19 **
Minor level: 14.06
Major level: 12.50
Minor level: 10.94
The VIX ened up closing at 18.72. The VIX dropped to under the 18.75 level. At this point, I would expect resistance at 20.31.
On the downside, the key level is 17.19. Two closes under 17.19 and the VIX should drop to 12.50.
$SPX:
Major level: 2,812.50
Minor level: 2,792.98
Minor level: 2,753.93
Major level: 2,734.40
Minor level: 2,714.88
Minor level: 2,675.83 **
Major level: 2,656.30 <
Minor level: 2,636.75
Minor level: 2,597.65 **
Major level: 2,578.10
By clearing 2,695 yesterday, this level should now be support. A close today above 2,675.83 and the S & P 500 should test 2,734.40.
On the downside, if the 2,695 level is violated, 2,646.50.
QQQ:
Major level: 175.00
Minor level: 173.44
Minor level: 170.31
Major level: 168.75 <
Minor level: 167.19
Minor level: 164.06 **
Major level: 162.50
Minor level: 160.94
Minor level: 157.81
Major level: 156.25
The QQQ closed at 167.83. The high yesterday was 168.26. The high was short of the 168.75 level by 49 cents. Look for a run up to this level.
165.63 should offer support.
IWM:
Minor level: 157.03
Major level: 156.25
Minor level: 155.47
Minor level: 153.91 **
Major level: 153.13 <
Minor level: 152.35
Minor level: 150.78
Major level: 150.00
Minor level: 149.22
Minor level: 147.66
Major level: 146.88
The IWM closed at 153.71. The IWM took out the 153.13 level. It will need two closes above 153.91 to move up to 156.25.
153.13 and 151.56 should now be support.
TLT:
Minor level: 120.70
Major level: 120.31
Minor level: 119.92
Minor level: 119.14
Major level: 118.75 <
Minor level: 118.36 **
Minor level: 117.58
Major level: 117.19 <
Minor level: 116.80
Minor level: 116.02
Major level: 115.63
The TLT closed at 118.03. Yesterday's high was 118.80, just 5 cents above the 118.75 level we expected to act as resistance. The TLT should now test 117.19.
Minor resistance is at 118.36 and 118.75.
GLD:
Major level: 131.25
Minor level: 130.47
Minor level: 128.91
Major level: 128.13
Minor level: 127.35
Minor level: 125.78 **
Major level: 125.00 <
Minor level: 124.22
Minor level: 122.66
The GLD closed at 125.18. 125.78 is a minor resistance level. Watch to see if the GLD can clear this level.
Two closes above 125.78 and the GLD should move up to 128.
The next level on the downside after 125, is 124.22. A break under 124.22 and the GLD should drop
to 121.88.
The GLD is at a major level. It will either break out or break down.
XLE:
Minor level: 76.95
Major level: 76.56
Minor level: 76.17
Minor level: 75.39
Major level: 75.00
Minor level: 74.22
Minor level: 72.66
Major level: 71.88
Minor level: 71.10
Minor level: 69.53
Major level: 68.75 <
Minor level: 67.97
Minor level: 66.41 **
Major level: 65.63
The XLE closed at 67.66. At this point, the XLE should test 68.75.
And the XLE closed above the midband on the daily chart, which is 67.19. This level should now offer support.
Also, the 65.63 level should offer support.
FXY:
Major level: 91.41
Minor level: 91.22
Minor level: 90.83 **
Major level: 89.06 <
Minor level: 88.87
Minor level: 88.48
Major level: 88.28
Minor level: 88.09
Minor level: 87.70
Major level: 87.50
Minor level: 87.31
Minor level: 86.92
The FXY closed at 90.31, dropping 43 cents. It is still trading above the upper band on the daily chart, which is 90.16.
A close under this level would set up a short. However, I would expect the FXY to bounce around before a change in trend.
89.84 should now be support.
AAPL:
Major level: 181.25
Minor level: 180.47
Minor level: 178.91 <
Major level: 178.13
Minor level: 177.35
Minor level: 175.78
Major level: 175.00
Minor level: 174.22
Minor level: 172.66
Major level: 171.88
Apple closed at 176.82. The objective for Apple should be to the 178.13 level.
175 should offer support. With the 30 and 60 minute charts in uptrends, buying oversold conditions off the shorter term charts should be the strategy.
WATCH LIST:
Bullish Stocks: MELI, NFLX, BLUE, PANW, RHT, WDAY, DNB, WDAY, MON, CRM, KLAC, MKC, GRUB, LULU, DIN, AKAM, AKAM, MSCC, AMAT, X
Bearish Stocks: CHTR, ADX, MLM, WHR, AGN, ZBH, EXPE, DLR, ALB, MDT, RBC, CVS, IRBT, KHC
Be sure to check earnings release dates.
