April 5, 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

AMC Long at $15.27
Short April 20th-$15.50 call @ 0.60
Premium Collected - $3.70

UNIT Long at $17.00
Premium Collected - $0.35

VRX Long at $16.40
Short April 6th-$16.50 Call @ ($0.50)
Premium Collected - $0.50

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We have one position that expires tomorrow and that is the short $16.50 calls on VRX. VRX closed yesterday under the strike, so I will monitor the position. If an adjustment is required, I will send out a separate email.

Yesterday, I suggested selling calls against the AMC position. You should be short the April 20th - $15.50 call. This now brings the premium collected to $3.70 per share. If these calls are assigned, the return will be 26%.

We also added another buy write. And that was on SNAP. You should have bought SNAP and sold the April 13th - $15 call. If these calls are assigned in one and one half weeks, the return will be 5.2% for that period.

And finally, I suggested a longer term call option. That was on KMI. The suggestion was to buy the September $15 call for $1.10. I do feel that KMI has bottomed out, but if it falters, I will suggest selling weekly calls against the longer term options.

Yesterday, I mentioned the 2,578.10 support level and if that did not hold, I would expect 2,500 to.

After the big gap down, the S & P 500 found support at 2,573.61, about 5 points under the support level and rallied the rest of the day.

The market ended up moving 76.25 points higher to close at 2,644.69.

The market moved almost one level yesterday. And is just under the 2,656.30 level, which now becomes the objective.

The key predictor of this move was the VIX.

The VIX could not get through the upper band or the 25 level. Yesterday's high was 24.51, just 49 cents under the 25 resistance level I have mentioned.

I also could not clear the upper band, which is 23.95.

Tomorrow at 8:30 EST, we will get the Non Farm Payroll report. This report could produce excess volatility.

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 20.06 yesterday. Yesterday's high was 24.51, or 49 cents under the major 25 level.

At this point, minor resistance should be at 21.88 and 21.09. A move down to 18.75 is expected.

$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 market rallied back above the 2,578.10 level yesterday. At this point, minor support should be at 2,627 and 2,603.

2,700 should be short term resistance. If the S & P 500 can clear this level, it should head higher.

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 159.74, closing above the 159.38 resistance level. 162.50 should offer some resistance.

And support should be at 156.25 and 157.81.

IWM:

Minor level: 153.91
Major level: 153.13
Minor level: 152.35
Minor level: 150.78 **
Major level: 150.00
Minor level: 149.22
Minor level: 147.66
Major level: 146.88

The IWM closed at 152.16. The IWM got just below the minor 149.22, with a low of 148.27.

A close today above 150.78 and the IWM should hit 153.13.

150 should now be support.

TLT:

Major level: 123.44
Minor level: 123.05
Minor level: 122.27 **
Major level: 121.88 < Hit
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 120.69. The TLT should now test 120.31.

And 120.31 should still offer support. 121.09 is minor resistance.

GLD:

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 <
Minor level: 124.22
Minor level: 122.66
Major level: 121.87

The GLD closed at 126.45. Looking for a retest of 125. At this point, 127.34 should be resistance.

125 should continue to 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 67.38. A close today above 66.41 and the objective should be to 68.75.

66.80 should be minor support. And 67.19 should be a support level as well.

FXY:

Major level: 92.19
Minor level: 92.00
Minor level: 91.61
Major level: 91.41
Minor level: 91.22
Minor level: 90.83 **
Major level: 89.06
Minor level: 88.87
Minor level: 88.48 <
Major level: 88.28
Minor level: 88.09

The FXY closed at 89.73. 89.45 is a short term support level. A break under that and it should continue lower.

At that point, the FXY should test 88.48.

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 171.61. A close today above 170.31 and Apple should test 175.

168.75 should be minor support.

WATCH LIST:

Bullish Stocks: DPZ, SBAC, GWW, AMT, RL, CCI, EXP, PSX, LULU, PGR, PEG, DK, WY, CNQ, LPX, MDU

Bearish Stocks: TSLA, WHR, ALXN, ZBH, SWKS, ALB, ALK, MDSO, DIS, WAGE, SIG, WPZ, JNPR, BITA

Be sure to check earnings release dates.