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.
GOGO? Long at $19.93
Total Premium Collected? $1.95
ASNA Long at $14.20
Total Premium Collected $.75
DUST Long $4.50
Total Premium Collected? $.70
FCX Long $12.45
Total Premium Collected? $.24
CIEN Long Oct 21-$22 Call? $1.39
Total Premiums Collected? $.83
Short Oct 21-$23.50 Call? ($.25)
KR Long Jan $30 Call? $1.30
KR Short Jab $33.75 Call? (.25)
..........................................................................................
Friday, I outlined two possible outcomes after the release of the Non Farm Payroll. The first was a move back to the weekly average true range.? And the second was another contraction.
As it turned out, the second scenario is how the markets traded.
The S & P 500 formed another inside day on the weekly chart. ?The range for last week was only 21.85 points.? ??
The weekly average true range is 42.60, or almost double last week?s range.
You expect a range expansion after an inside day, so expect a move to at least the weekly average true range after two inside days.
This afternoon we will hear from Alcoa, which begins the earnings season.? Friday, we will hear from Citibank and JP Morgan.
Wednesday we will get the FOMC minutes at 2:00 EST.
Pre open, the S & P 500 is trading almost 10 points to the upside.? Watch to see if last week?s high of 2,165.86 is violated. If so, I would expect continued follow through to the upside.
Here are the key levels for the markets.
$VIX:
Major level - 18.75
Minor level - 17.96
Minor level - 16.41
Major level - 15.63
Minor level - 14.85
Minor level - 13.28
Major level - 12.50 *
Minor level - 11.72
14.06 continues to offer minor resistance.? And 12.50 continues to offer major support.
A break under 13.28 and 12.50 should be tested.
$SPX:
Major level - 2,250.00
Minor level - 2,234.38
Minor level - 2,203.12
Major level - 2,187.50
Minor level - 2,171.88 *
Minor level - 2,140.62 *
Major level - 2,125.00
Minor level - 2,109.38
Minor level - 2,078.12
Major level - 2,062.50
The S & P 500 is trading between the 2,140 and 2,172 levels. 2,156 should offer minor support. And I would expect 2,168 to offer resistance.
The 60 minute chart is still in a downtrend, so expect more choppy trading until the 60 minute chart moves into an uptrend.? The 2,163 level should be resistance.? If price can get above that level, then it should act as support.
QQQ:?
Major level - 121.88
Minor level - 121.10
Minor level - 119.53
Major level - 118.75 *
Minor level - 117.97 *
Minor level - 116.41 *
Major level - 115.63
Minor level - 114.84
Minor level - 113.28
Major level - 112.50
The QQQ continues to hold the 118.75 level.? If it can move above it, I would expect 117.97 to act as support.? 119.53 would then be the next objective.
The short term 60 minute chart for the QQQ is in an uptrend. The QQQ continues to be the stronger market.
TLT:?
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
Minor level - 133.60 *
Minor level - 132.03
Major level - 131.25
The TLT broke under the 134.38 level, hitting a low of 133.09, before closing at 133.92.
A bounce and a move back up above 134.38 would be expected.? Minor 133.60 level should be support. To retest 137.50, the TLT will need two closes above 135.16.
GLD:
Minor level - 125.78 *
Major level - 125.00 *
Minor level - 124.22
Minor level ? 122.66
Major level ? 121.88
Minor level ? 121.10
Minor level ? 119.53
Major level ? 118.75
The GLD hit the 118.75 objective.? A bounce here would be expected.? But, I expect the GLD to fail and continue lower.
121.88 should be upside resistance.? If 121.88 is exceeded, 123.44 should be the area to look for a reversal.
XLE:
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 - 67.96 *
Minor level - 66.41
Major level - 65.63
The 60 minute chart has moved into an uptrend.? 69.53 should be support.? Objective should still be up to 71.88.
FXY:
Major level: 96.88
Major level: 96.09
Major level: 95.31
Major level: 94.53 *
Major level: 93.75 *
Major level: 92.97
Major level: 92.19
The FXY bounced up and closed at 93.79, just four cents above the 93.75 level.
Lower levels should offer support.? 93.36 should offer short term support.? And 94.14 is the level to watch on the upside.? A break above it and the
FXY should continue higher.
AAPL:
Major levels for Apple are 118.75, 115.63, 112.50, 106.25, 100, 93.75, and 87.50.
112.50 continues to offer support.? If Apple can close above 115.63, a move up to 125 should be expected.
114.84 is minor resistance and 113.67 should offer minor support.
Watch list:
Bullish Stocks: PCLN, AMZN, NTES, FLT, CXO, CMI, EW, ADBE, DE, LLY, JPM, CAB, ROST, LVS, CLR, AZPN, PTC, WGO
Bearish Stocks:? REGN, CI, DPS, VRTX, GILD, SRCL, CRM, NKE, UA, ALNY, VRX
Be sure to check earnings release dates.
Legal Disclaimer
There is a very high degree of risk involved in trading. Past results are not indicative of future returns. MadHedgeFundTrader.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles and all other features are for educational purposes only and should not be construed as investment advice. Information for futures trading observations are obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein. Affiliates of MadHedgeFundTrader.com may have a position or effect transactions in the securities described herein (or options thereon) and/or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies.
Trade Alert (SPY) - October 10, 2016