October 5, 2017 - MDT Pro Tips A.M.

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.

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

DYN Long at $12.55
Premium Collected $0.48

APA Long Oct $47.50 Call at $3.45

SNAP Long at $15.20

PANW Long Oct $145 Call at $2.44

AMC Long at $15.27
AMC Short Oct $16 Call at $.43

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The S & P 500 hit the 2,539.10 objective. The high for the day was 2,540.53, taking out the objective by 1.43 points.

The market did close under the 2,539.10 level. It closed at 2,537.74 or 1.36 points under the objective.

The question now is where does the market go from here?

Since the pivot low on August 21st, the S & P 500 has now run four levels. Though a pullback could occur at the 2,539.10 level, I suspect the market will run up to the next level before it does correct.

A move up to 2,578.10 would be a five level move for the market. And usually, in bull markets, the range movements are either three or five levels.

To confirm the move up to 2,578.10, the S & P 500 will need two closes above 2,548.85, so we know in advance what the market should should do to make it higher.

It is possible a pause could happen at the 2,549 level. Just like it did when the S & P 500 struggled to get through 2,509.78.

The concern at the moment is the level of the VIX ... and the fact that we have now had two consecutive days in which both the S & P 500 and the VIX closed to the upside.

This is a divergence and quite frankly, I do not recall the last time this happened. Suffice it to say, it has not happened in quite a while.

Pre open, the market is trading to the upside about 3 points and should open higher. Watch for support in the 2,536 area.

Tomorrow, at 8:30 AM EST we will get the non farm payroll.

Continue to follow the resistance levels.

Here are the Key Levels for the Markets:

$VIX:

Major level: 15.63
Minor level: 14.85
Minor level: 13.28
Major level: 12.50
Minor level: 11.72
Minor level: 10.16 **
Major level: 9.38 <
Minor level: 8.99 **
Minor level: 8.20
Major level: 7.81

The VIX closed at 9.51. The low for the day was 9.63. The VIX is trying to hold the major 9.38 level. To move higher, the VIX will need two closes above 10.16.

To move lower, the VIX will need two closes under 8.99.

Minor support should be at 9.18. And minor resistance is at 9.77 and 9.96.

$SPX:

Major level: 2,578.10
Minor level: 2,558.60
Minor level: 2,548.85 **
Major level: 2,539.10 <
Minor level: 2,529.33 **
Minor level: 2,509.78
Major level: 2,500.00
Minor level: 2,492.20
Minor level: 2,476.00
Major level: 2,468.80

Objective hit ... again! On the downside, 2,529.33 should now be support.

And minor support should be at 2,534.20. On the upside, 2,543.90 could offer resistance.

Two closes above 2,548.85 confirms the move up to 2,578.10.

QQQ:

Major level: 150.00
Minor level: 148.44
Minor level: 145.31 ***
Major level: 143.75 <
Minor level: 142.18 ***
Minor level: 139.06
Major level: 137.50
Minor level: 135.94
Minor level: 132.81

The QQQ closed at 146.08. The objective is still to 150.

The minor support at 145.51 held yesterday. The low for the day was 147.47.

Minor support is at 145.70. Minor resistance at 146.39.

IWM:

Minor level: 150.78 **
Major level: 150.00 <
Minor level: 149.22 **
Minor level: 147.66
Major level: 146.88
Minor level: 145.32
Minor level: 144.53
Major level: 143.75
Minor level: 142.97

The IWM closed at 149.85, just under the 150 objective. The IWM has moved exactly 5 levels, so a pause would be expected.

At this point, watch both levels under 150, which are 149.22 and 150.78 to determine the next move.

TLT:

Major level: 131.25
Major 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: 124.61**
Minor level: 123.83
Major level: 123.44

The TLT closed at 124.41. The objective should be to 123.44.

123.83 is minor support and 125 is minor resistance.

GLD:

Major level: 128.13
Minor level: 127.35
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 closed at 121.17. The GLD should drop to 118.75.

Minor support is at 117.19. Minor resistance is at 121.88.

XLE:

Major level: 71.89
Minor level: 71.11
Minor level: 69.54
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

The XLE closed at 68.34. The XLE is holding above the mid band on its daily charts. the midband is 67.74. The XLE needs to clear 68.75 to head higher.

68.16 and 67.97 should be minor support. 69.14 could offer resistance.

FXY:

Major level: 89.06
Minor level: 88.67
Minor level: 87.89
Major level: 87.50
Minor level: 87.11
Minor level: 86.33
Major level: 85.94 <
Minor level: 85.55 ***
Minor level: 84.77
Major level: 84.38 <

The FXY closed at 85.20, under the 85.55 support level. The objective should still be down to 84.38.

85.35 should offer minor resistance. 84.96 is minor support.

AAPL:

Major levels for Apple are 165.63, 162.50, 159.38, 156.25, 153.13, and 150.

Apple closed at 153.48. 153.13 should still offer minor support. 154.30 should offer resistance.

Resistance is in the 157 to 159 area. The 30 minute chart is getting close to crossing into an uptrend. Once it does cross over, long positions will make sense again.

WATCH LIST:

Bullish Stocks: GOOGL, LMT, BIDU, FDX, DPZ, RTN, LRCX, CELG, PX, ALB, CME, DE, CAT, UTX, RHT, ADP, KSU, KLAC

Bearish Stocks: WBA, TAP, WBA, DXCM, HA, TECK

Be sure to check earnings release dates.