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)
..........................................................................................
The market sold off hard yesterday, with the S & P 500 closing almost 27 points to the downside.? It closed at 2,136.73.
The VIX took out the 15.63 level and hit a high of 16.47 before moving down to settle at 15.36.
Essentially, the S & P 500 ran down to almost the next level, which is 2,125, stopping a few points above that level.? Watch to see if this level of support holds.
?In two days, the market dropped from 2,171.88 to almost 2,125.
The down to up volume hit 8.01.? I usually consider a level above 9 to 1 as a selling climax, so yesterday did not qualify.
Having said that, the markets are oversold short term and a bounce would be expected. But, I would expect a failure on the bounce and another down move.
The other critical technical condition from yesterday is that the S & P 500 broke under and closed under the lows of the prior two weekly inside bars. This shifts the momentum to the downside for the short term.
Alcoa reported with a miss and the shares were down over 11%.? If earnings start to come in short of expectations, expect more selling.
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
With the VIX closing under 15.63, I would expect a rally to fail. Resistance should be at 16.41 and 17.19. There should be another spike up in the VIX and I would expect it to fail.
$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
2,125 should be major support.? If the S & P 500 can hold at or above this level and the VIX reverses to the downside, expect a bounce.? Watch for the 12:30 timeframe for a reversal.
The market is oversold in the short term.?
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 closed at 117.52, just under the minor 117.97 level.? A close today under 117.97 and the downside objective should be to 115.63, which should be strong support.? If that level cannot hold, I would expect 112.50 to hold.
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
132.81 is a level that should hold for the TLT.? If this level is violated, expect the TLT to drop lower.? Watch the 134.38 level. If the TLT can get above that level, I would expect a bounce.
GLD:
Minor level - 124.22
Minor level ? 122.66
Major level ? 121.88
Minor level ? 121.10
Minor level ? 119.53
Major level ? 118.75
Minor level ? 117.97
The GLD did not quite get to the 121.88 level.? The high for the day was 120.16. At this point, I would expect a move down to the 112 area.? 117.97 should offer minor support.
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
Since hitting the 71.88 objective, the XLE has pulled back slightly.? 69.53 should offer short term support.? I would expect another rally in the XLE.
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 reclaimed the 92.97 level. ?Expect this level to now act as support.? 94.14 should be minor resistance.? FXY is oversold in the short term.
AAPL:
Major levels for Apple are 118.75, 115.63, 112.50, 106.25, 100, 93.75, and 87.50.
With Apple closing above 115.63, a move up to 125 could forthcoming. Continue to b
uy against support until objective is hit.
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.