January 17, 2019 - MDT Pro Tips A.M.

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 - $1.65

OI Long Feb $19 call @ $1.70

MDR Long @ $9.31

DIS Long Jan 25th $107 Call @ $3.35
DIS Long Jan 25th $107 Put @ $3.10

X Long at $20.30
X Jan 18th - $21.00 Call @ $0.50

RRC Long at $11.85
RRC Short Jan 25th - $12.00 Call @ $0.30
......................................................................................... 

Though the S & P 500 continued to tick up yesterday, there was a serious contraction.  For the day, the market closed 5.80 points higher.

But, the range for the day was only 13.08 points. This was the narrowest trading day since September 19, 2018, when the range for the day was only 8.54 points.

September 19, 2018 just happened to be two days before the all time high.

So, I do stand up and take notice when this type of price action occurs.

And when you compare the range to the average true range of 47.29 points, the range was less than 30% of the average.  As a comparison, the range as a percent of the average true range on September 19, 2018 was 47%. 

The other fact about the all-time high was that the day before the top, both the S & P 500 and the VIX closed higher.

And yesterday, we had the same divergence.  With the S & P 500 closing 5.80 points, the VIX closed 0.26 higher.

The other fact about yesterday's price action was that it was nearly a perfect doji.

The market opened at 2,614.76 and closed at 2,616.10.

This type of price action can signal indecision.  So, for today we need to monitor a violation of yesterday's high or low.

The high was 2,625.76 and the low was 2,612.68.

In addition to the close of 2,616.10, the midpoint of 2,619 should also be watched today.

Pre open, the S & P 500 is trading about 11 points lower.  This projects to an open around 2,605 or about 7 points under yesterday's low.

Watch yesterday's low on a rally to see if the market stalls out there.
 
Continue to monitor the levels as I mentioned above.

Here are the Key Levels for the Markets:

$VIX: 
 
Major level: 25.00 
Minor level: 24.22
Minor level: 22.66
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

The VIX closed at 19.04 for the day.  The VIX managed to close back above 18.75 and it diverged with the S & P 500.  Both closed to the upside.

After dropping from above the upper band on the daily chart, the VIX dropped to just above the midband.  The midband is 17.06.

17.19 should be a support level for the VIX.  And watch to see if the VIX can hold 18.75.

SPX: 

Major level: 2,656.30 <
Minor level: 2,636.75
Minor level: 2,597.65 **
Major level: 2,578.10 <
Minor level: 2,558.58 
Minor level: 2,519.53 
Major level: 2,500.00 
Minor level: 2,484.38 
Minor level: 2,453.13 
Major level: 2,437.50  
Minor level: 2,421.88 

Yesterday was the second close above 2,597.65 which now  suggests the S & P 500 should move up to 2,656.

The question now is will we have a pullback before it heads up there.

Watch the 2,597.70 for possible support.  And technical support is at 2,592.95.

2,622.10 should be minor resistance on the upside.  

QQQ:  

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 
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 QQQ closed at 162.35.  Yesterday's high took out 162.50 by 1.25, but it could not close above 164.06.

160.94 and 160.16 should be minor support.

The 60 minute chart is very close to crossing into an uptrend. As you know, a bullish crossover will imply higher prices to follow.  159.65 is the midband and should still be support.

IWM:
 
Major level: 150.00
Minor level: 148.44
Minor level: 145.31**
Major level: 143.75 <
Minor level: 142.19 
Minor level: 139.06 
Major level: 137.50 
Minor level: 135.94 
Minor level: 132.81 

The IWM closed at 144.52.  This was the first close above the major 143.75 level.

142.97 should offer minor support.  Like the QQQ, the 60 minute chart is very close to crossing into an uptrend.

The IWM has moved three levels off the bottom which does suggest the downtrend is over.

TLT:  

Major level: 125.00
Minor level: 124.61
Minor level: 123.83
Major level: 123.44 
Minor level: 123.05
Minor level: 122.27 
Major level: 121.88 
Minor level: 121.49 
Minor level: 120.70
Major level: 120.31 <
Minor level: 119.92

The TLT closed at  120.16, up 0.12 on the day.  The TLT closed just under the 120.31 level.  It will need to clear this level to move higher.

The daily chart did cross into an uptrend.  This suggests that buying the next pullback makes sense.

GLD:  

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 
Minor level: 117.97 
Minor level: 116.41 
Major level: 115.63 

The GLD closed at 122.27.  After getting slightly above the 121.88 level, the GLD dropped and closed right on the line.

Watch to see if 121.88 holds.  If it can't, I would expect a farther pullback.

The next minor level is 122.66.  Two closes above 122.66 suggests a move up to 125.

XLE: 

Major level: 68.75 
Minor level: 67.97 
Minor level: 66.41 
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 62.  The XLE continues to trade around the 62.50 level.

Clearing 62.50 would be bullish.  But at this point, it is resistance.

The XLE has now moved three levels off the bottom. This suggests a bottom is in.  59.38 should be support on a pullback.

FXY:

Major level: 89.84
Minor level: 89.65
Minor level: 89.26
Major level: 89.06
Minor level: 88.87
Minor level: 88.48 **
Major level: 88.28 
Major level: 87.50 <
Major level: 86.72
Major level: 85.94 
Minor level: 85.75
Minor level: 85.36 
Major level: 85.16 
Minor level: 84.97 

The FXY close at 87.61. It closed down 0.24 on the day.  It will need two closes above 88.48 to move higher.

87.50 should offer support on the first test.  But, am biased for the FXY to head lower.

AAPL:

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: 159.38 
Minor level: 153.13 ** 
Major level: 150.00 
Minor level: 146.88 
Minor level: 140.63
Major level: 137.50

Apple closed yesterday at 154.94.  Yesterday was the first close above the 153.13 level.  A close today above it suggests a move up to 162.50.

Starting to get interested in trading a bounce.  Waiting for one more price confirmation.  The price confirmation I was looking for is the 30 minute chart crossing into an uptrend.  Yesterday, Apple has the bullish crossover.

Will look to buy calls on the next pullback.

WATCH LIST:

Bullish Stocks: CMG, REGN, VRTX, CRM, KMB, WIX, DG, ZEN, THS, FN, FL, CF, ROKU, CIEN

Bearish Stocks: BKNG, PODD, UN, UL, IBKR, WTW, CAG, STZ

Be sure to check earnings release dates.