April 20, 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
Premium Collected - $0.65
Short April 27th - $15 call @ $0.35

TEVA Long $18.06
Short April 27th - $18.50 call @ $0.35
Premium collected - $0.35

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You should be short the $16.50 call that expires today on VRX, if you followed the alert. That is the only open position that expires this week.

VRX closed yesterday at $17.33 or 83 cents above the strike.  If I suggest an adjustment to the position, you will receive a separate email.

You should have added the short $15 call on SNAP yesterday that expires next Friday.

The S & P 500 pulled back yesterday and closed 15.51 points to the downside. It closed for the day at 2,693.13.

This sell off did not come as a complete surprise.  In fact, I mentioned how oversold the VIX was. And the VIX did not surprise again.

We were looking for minor support on the VIX at 15.63 and late Wednesday, the VIX got as low as 15.31 before rallying into the close.  And yesterday, the VIX dropped to 15.59 or 4 cents under the 15.63 level before rallying.

The high on the VIX yesterday came in at 16.92. And we were looking for resistance at 17.19.  And after hitting 16.92 on the VIX, it dropped the rest of the day to close at 15.96.

What is interesting about this is the high yesterday fell short of the 17.19 level by 27 cents.

And Wedneday's low at 15.31 was 32 cents.  The difference between the two levels is 5 cents.  And yesterday's low versus the the 15.63 was 4 cents.

All this math may make your head spin. But, once again it shows how the market tends to balance itself out.

In fact, on this week's webinar, I show an example on the S & P 500 how this balance worked out last week.

If you did not listen to the recording, it is posted in the members area. You may want to have a listen.

The range for this week is 52 points.  This is 28 points less than the weekly average true range.

The low so far this week is 2,665.16 and that was made on Monday.

If we assume that is the low for the week, then the projected high using the weekly average true range should be around 2,993.

Of course, the market could contract this week, but this gives us an idea of where the market could go.

Pre open, the markets are relatively quiet.  Look for the VIX to continue down as a confirmation that the markets should head higher.

I mentioned yesterday that the 60 minute chart for the S & P 500 is still in a downtrend and that price was trading above the midband.

And therefore, the midband should act as support.  The midband is 2,686.64. The market dipped below that level and recaptured it. For three hours yesterday the S & P 500 traded right at the midband. 

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 16.05 yesterday.  I am still biased for a retest of the 12.50 level.

And 16.41 is minor resistance.  And so is 17.19.  If the VIX fails at either level and heads down, look for the market to head up.

14.06 is a minor support level.  A break under that level will further confirm a drop to 12.50.  

$SPX: 

Major level: 2,812.50
Minor level: 2,792.98
Minor level: 2,753.93
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 

The objective should still be to the 2,734.40 level. On the downside, watch the minor 2,675.80 level.  I would expect this level to hold as support.  If it can't, the market should drop lower. 

Also, minor support is at 2,678.20 and 2,666.

QQQ:  

Major level: 175.00
Minor level: 171.88
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 164.491.  The upside objective for the QQQ is still to the  175 level.

Look for major support at 162.50.  And minor support at 164.06.

IWM:

Major level: 159.38 <
Minor level: 158.60
Minor level: 157.03 **
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 156.39.  The objective should still be the 159.38 level.

154.69 should be minor support.

Technical support is also right at the midband on the 60 minute chart, which is now154.09.  The 60 minute chart is close to crossing into an uptrend.  If this should happen, it will help to confirm the 159.38 objective.

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 119.32.  The TLT failed to close above 120.70, which should now be resistance.

Look for minro support at 118.75.  If this level cannot hold, look for the TLT to head lower.

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 127.60.  Resistance should still be at 128.13.

To move lower though, the GLD will need two closes under 127.35.

Minor support should be at 126.56.

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 73.65.  The objective should now be to 75.

72.66 should be minor support.

The major 75 level will be key. If the XLE cannot clear it, I would expect a pullback.

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 89.23.  The FXY is jusy above the 89.06 support level.  If the FXY breaks under 89.06, I would expect it to head lower.

If the FXY can hold 89.06, I would expect a retest of 90.63.  89.16 is minor support.

AAPL:

Major level: 181.25
Minor level: 180.47
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 

Apple closed at 172.80.  173.44 is a minor support level.  A close under this level today and Apple could drop to 168.

Failing to hold 175 means it should be resistance.

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.