April 16, 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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SNAP got as low as $14.36 PM Friday, only to rally late in the day to close at $14.88. This means you keep your stock and book the profit you received when you sold the calls. I will look to sell another round of calls this week.

Now onto the market.

The S & P 500 closed at 2,656.30. It closed down for the day 7.69 points. The range for the day was 35.21 points, less than the daily average true range of 46.68 points.

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.

For the week, the S & P 500 closed 51.83 points to the upside. This was also less than the weekly average true range, which is now 79.95. The range for the week was 69.47 points.

These contractions tell us to expect an expansion.

Last week, I demonstrated how to project out the high for the week, which is based on the average true range. Using the weekly average true range, the high last week projected to 2,689.68. The actual high was 2,680.26 or about 9 points under the projection.

Support from last week’s weekly price bar should be in the 2,636 to 2,645 area.

The short term 30 minute chart for the S & P 500 crossed into an uptrend, further indicating that short term momentum is shifting to the upside.

Some of the big banks reported last Friday. And this week we will start to get into earnings season.

This afternoon, after the close we will hear from NFLX. Tomorrow we will get Goldman Sachs.

Earnings will be closely watched.

Buybacks continue to be strong with the $12 Billion announcement from AVGO. The buybacks for March should be posted in the members area for your downloading convenience.

Also, this Wednesday will be our regular webinar. If you have a question or a chart you would like me to review, please email me directly at davismdt@gmail.com and I will do my best to address your comments on the webinar.

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 17.41 yesterday, just under the major 18.75 level. We were looking for a push down under 18.75 and we got it.

The VIX also got to within 10 cents of the 17.19 level. To move lower, the VIX will need two closes under 17.19.

A break under 17.19 and it should be resistance. And also resistance should be at 17.97.

$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 Friday exactly on the 2,656.30 line. To move up to the next level, which is 2,734.40, the S & P will need two closes above 2,675.83.

2,670.90 a short term support level that should no doubt be tested today. Also, minor support is at 2,661.10.

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 161.37. The high for the day took out the 162.50 level. 163.28 is a minor resistance level. If the QQQ can clear this level, look for it to move higher.

161.33 is a minor 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 153.95. A close today above 153.91 and the IWM should test 156.25.

153.91 should be minor support.

Technical support is also right at the midband on the 60 minute chart, which happens to be 153.69. And technical support is at 153.72.

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 120.90. A close today above 120.70 and the TLT should test 121.88.

120.51 is minor support. And also at 120.31.

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 127.45. Minor support is at 127.35. A break under this level and a test of 125 is possible.

128.13 is minor resistance.

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 71.41. The XLE came within 18 cents of the 71.88 level, we were looking for.

At this point, I am looking for a move up to the 75 – 76 area. And I would expect some resistance at 75.

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 89.21. The low for the day took out the 89.06 level. If the FXY can hold above 88.28, I would expect a bounce. Look for 89.06 to act as support.

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 174.73. The high took out the 175 level, which we were looking for.

171.88 should continue major support. And if Apple can clear 175, look for that level to offer support.

WATCH LIST:

Bullish Stocks: BDX, LLL, WYNN, CMI, MON, CVX, EOG, VRSK, VLO, HLF, MLNX, MPC, OXY, HP, DLB, NTAP, APC, CLR, MGA

Bearish Stocks: CMG, MLM, CB, EFX, SMG, TAP, UAL, D, CCL, TSRO, WAGE

Be sure to check earnings release dates.