April 23, 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

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 have been assigned on the short $16.50 call on VRX on Friday. The return ended up at 5.4% for two weeks.

For this week, you should have two short call positions that expire this Friday. That is the short $18.50 call on TEVA and the short $15 call on SNAP.

Onto the markets.

The S & P 500 continued to sell off on Friday. For the day, it closed 22.99 to the downside. It closed at 2,670.14.

Though we were looking for a bounce in the VIX, it has not exactly spiked up in a manner that would indicate a deeper pullback is coming.

The VIX got above the 17.19 resistance level, but closed beneath it at 16.88. If the VIX gets through 17.19, I would expect the market to continue down.

Resistance from Friday's daily price bar is at 2,677 to 2,681.

Friday's close was below the 2,675.83 minor resistance level. This level should now be resistance. And a close today under 2,675.83 and the S & P 500 should drop to 2,602.50, or 2,627.

The market would have to reclaim 2,675.83 to move higher.

For the week, the S & P 500 actually closed higher. It closed 13.84 points to the upside. But, it formed a shooting star candle. This is when the close is approximately the open.

Last week, the S & P 500 opened at 2,670.10, moved up to a high of 2,717.49, before dropping to close at 2,670.14.

So, the market essentially closed where it started.

And the range for the week was 56.88 points. Compared to the average weekly true range of 78.61, the range contracted. The range for the week was only 72% of the average, which tells us that an expansion should follow.

Resistance levels from last week's weekly price bar is at 2,670 and 2,689.

Also, the close should be a reference point for this week.

Last week's low was 2,660.61 and should also be monitored. A break under the low would be bearish and indicate that it would be resistance on a rally.

The short term 30 minute chart for the S & P 500 remains bullish. And the 60 minute is bearish. Also, price is just under the midband on the 60 minute, which is 2,684.58. If the S & P can clear this level, it would then be support, but at the moment, it is resistance.

Both short term timeframes are oversold.

Earnings continue this week. GOOGL reports today after the close. BIDU reports this Thursday after the close, along with AMZN.

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 16.88 Friday. I am still biased for a retest of the 12.50 level.

Short term resistance is at 17.19 and 17.97. I would not expect the VIX to clear 18.75.

Watch for the VIX to reverse to the downside as a clue the markets should head up.

$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.

On the downside, 2,646.50 is another support level to watch. If the S & P 500 closes for two days under 2,646.50, the market could drop to 2,548.

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 162.30. This was just 20 cents under the major 162.50 support level.

Watch to see if the QQQ can reclaim the 162.50 level.

On the downside, 159.38 is the key level. Two closes under 159.38 and the QQQ could drop to 150 - 153.

Minor support is at 161.72 and 160.94.

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 155.55. The objective should still be the 159.38 level.

155.47 is a minor support level. Two closes under 155.47 and the IWM should drop to 153.

Technical support is also right at the midband on the 60 minute chart, which is now154.18. 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 118.46. The TLT closed under the major 118.75 level.

The minor 117.97 level is the key level to watch. A break under this level and the TLT should continue lower.

Daily trend remains bearish.

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 126.63. A close today under 127.35 and the GLD should test 125.

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

125.78 is a minor support level.

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 73.30. The objective should still 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 89.01. 88.87 is a minor support level. Two closes under 88.87 and the FXY could drop to 88.

88.28 should offer 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 165.72. For the day, Apple was down $7.08 or 4.1%.

165.63 is a minor support level. If that cannot hold, Apple should drop to 162.50.

WATCH LIST:

Bullish Stocks: LMT, HUM, FDX, DPZ, STZ, LLL, RTN, WYNN, AET, UNP. VRSN, CLB, KSU, ANDV, EOG, AXP, CTXS, MPC, ROST, FSLR, OXY, NTAP

Bearish Stocks: REGN, MLM, CLX, KMB, SWKS, SMG, PG, IRBT, TSRO, TEN, CTRP, TPX, HOG, CRUS, ACIA

Be sure to check earnings release dates.