April 13, 2018 - 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

UNIT Long at $17.00
Premium Collected - $0.35

VRX Long at $16.40
Premium Collected - $0.79
Short April 20th-$16.50 call @ $0.29

SNAP Long at $14.54
Short April 13th-$15 call @ $0.30
Premium Collected - $0.30

KMI Long September $15 call @ $1.10

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If you have been following the alerts, you should be short the $15 call on SNAP that expires today.  SNAP closed yesterday at $14.92 yesterday or 8 cents under the strike.  You will receive a separate email if I adjust the position. If you do not receive a separate email on the SNAP, assume either I will suggest the calls be assigned or the price is under the strike price. 

Now back to the market.

The S & P 500 closed at 2,663.99.  It was up 21.80 points on the day. 

The intraday range was only 20.88 points. As compared to the average true range of 47.56 points, you can see that the range for the day was less than one half the average.

This was the second consecutive day of contractions.  As I mentioned yesterday, we know an expansion is coming.  The timing of the expansion can be difficult to predict.

I demonstrated yesterday how we could project out a potential top in the S & P 500 for this week.

It is based on math and uses the weekly average true range to project out where the market top or bottom could be.

If you add last week's average true range to the low this week, you get a projected top of 2,689.68.

Yesterday's high was 2,674.72.  This puts the weekly high within 15 points of that price objective.

Here is a little fact I did not mention yesterday.

For a bullish week, you expect the low for the week to be near the open.  Actually, this works on any timeframe.  So, for a bullish day on a daily price bar, you expect the low for the day to be near the open.

At this point, the low for this week was on Monday when it was  2,610.79.

Pre open, the S & P 500 is trading about 15 points to the upside, which should put the market right at the weekly projection.

Remember, it does not mean that the market will stop going up.  If just us a general idea of where the market could go.

Look to see how the S & P 500 reacts around the minor 2,675.83 level.

All three big banks that reported, C, JPM and WFC are all trading to the upside pre open after reporting.
  
Continue to monitor the longer term levels for the market.

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 closed at 18.49 yesterday, just under the major 18.75 level.

The high for the VIX was 19.92, just 16 cents under the 21.09 level, which I mentioned should be resistance.
 17.19 is a minor support level.  A break under this level and it should continue lower.

$SPX: 

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 
Minor level: 2,558.58 
Minor level: 2,519.53 
Major level: 2,500.00

The S & P 500 closed at  2,663.99.  The next level on the upside is 2,675.83.  If the S & P can close above it for two days, the objective becomes 2,734.

2,651 should continue to be a support level.

QQQ:  

Minor level: 165.63
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

The QQQ closed at 162.21.  The high for the day took out the 162.50 level.

160.94 is a minro support level.  If the QQQ can clear 162.50, look for it to continue higher.

IWM:

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 

The IWM closed at 154.76.  Look for 153.13 to act as support.  On the upside, resistance could come in at 156.25.

A close today above 153.91 and the objective is to the 156.25 level.

Technical support is also right at the midband on the 60 minute chart, which happens to be 153.69.

TLT:  

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 
Minor level: 119.14 
Major level: 118.75 
Minor level: 118.36 

The TLT closed at 120.62.  120.70 should be minor resistance.

If the TLT breaks under 120.31, I would expect a move down to 118.75.  Support should be at 118.75.

GLD:  

Major level: 134.38
Minor level: 133.60
Minor level: 132.03
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 

The GLD closed at 126.62.  If the GLD pulledback after failing to close above 128.13.   A close today under 127.35 now sets the GLD up for a move down to 125.

125 should be support.

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 70.63.  The XLE should now test 71.88.

At this point, I am looking for a move up to the 75 - 76 area.  70.31 is minor support.

FXY:

Major level: 90.63
Minor level: 90.43
Minor level: 90.04
Major level: 89.84 <
Minor level: 89.65
Minor level: 89.26
Major level: 89.06 

The FXY closed at 89.35.  Watch for resistance at 89.45.  A close today under 89.65 and the FXY should drop to 89.

AAPL:

Minor level: 178.91 
Major level: 178.13
Minor level: 177.35
Minor level: 175.78 
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

Apple closed at 174.14.  173.44 should be minor support. Upside objective should be to 175.

171.88 should be major support.

WATCH LIST:

Bullish Stocks: HUM, MCD, PVH, BURL, RL, KSU, CLB, PSX, VLO, LULU, YUM, KORS, LEN, COP, CLR, APC, HFC, MTH

Bearish Stocks: AVGO, ADS, WHR, CB, ALXN, DGX, WST, MDT, TAP, WBA, CERN, LUV, CTRP. ALKS, CRUS, BEN 

Be sure to check earnings release dates.