August 10, 2017 - 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.

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Just as it seemed the market would continue its sell off from Tuesday, the S & P 500 found support at 2,462 and rallied back to close at 2,474.02. For the day it was down only .90.

And the market contracted with a range of only 12.33 points, as compared with a range of 20.55 on Tuesday.

As I have been saying, with the short term intra day charts in bullish formations, you should expect a rally in the market. And I also mentioned that the VIX needs to take out 12.50 in order for this pullback to be considered anything more than a 'normal' correction.

I also mentioned that the VIX broke above the upper band on the short term 10 minute chart on Tuesday, which suggest we should see a retest of the upper band again.

As it turned out, the VIX gapped above the upper band at the open and pullback and managed to move back above the upper band again .... and stalled right at 12.54.

This action of course, move the SPY up about 1 point in an hour and one half into the close.

At this point, I would expect another retest of the upper band for the VIX. that level is 12.15. If the VIX does break through it again this will tell us that the VIX should test it again.

As for the S & P 500, short term support should be at 2,453. And under that level is 2,445.30, which is a level I would NOT expect the market to take out. If it does, the market should head lower.

Because the market has broken under the weekly support level of 2,473 to 2,476, this area should act as resistance on any rally. Actually, yesterday's close was within this range, but with an anticipated lower open this morning. it should act offer resistance on a rally.

Continue to follow the resistance levels.

Here are the Key Levels for the Markets:

$VIX:

Minor level: 16.41
Major level: 15.63
Minor level: 14.84
Minor level: 13.28
Major level: 12.50
Minor level: 11.72
Minor level: 10.16 **
Major level: 9.38 <
Minor level: 8.60 **
Minor level: 7.03
Major level: 6.25

The VIX did hit the 12.50 level and sold off. At this point, I would not expect the VIX to exceed 13.28. If it does, it would indicate a move higher.

10.94 should be minor support on a higher open.

$SPX:

Major level: 2,500.00
Minor level: 2,484.38
Minor level: 2,453.12 <
Major level: 2,437.50 **
Minor level: 2,421.88
Minor level: 2,390.62
Major level: 2,375.00
Minor level: 2,359.38
Minor level: 2,328.12
Major level: 2,312.50

Support should be around the 2,453 level. If that does not hold, the major 2,437.50 level most likely will.

2,464.80 is a minor level. And if the S & P 500 does close under that level for two days, it would indicate a move down to 2,453.

QQQ:

Major level: 150.00
Minor level: 148.44
Minor level: 145.31 ***
Major level: 143.75 <
Minor level: 142.18
Minor level: 139.06
Major level: 137.50
Minor level: 135.94
Minor level: 132.81

The QQQ dropped to a low of 142.79, before rallying back to close at 144.12, off .19 on the day.

It broke under the downside level of 143.36, but managed to recoup that level. I would expect a retest of 143.36. A break under that level and the QQQ should drop to 142.

IWM:

Major level: 146.88
Minor level: 146.09
Minor level: 144.53
Major level: 143.75
Minor level: 142.97
Minor level: 141.41
Major level: 140.63
Minor level: 139.85
Minor level: 138.28 **
Major level: 137.50 <

The IWM is close to the major 137.50 level. Yesterday's low was exactly on the minor 138.28 support level.

The IWM should open just under the 138.28 level, so I would expect higher levels to offer resistance with a move down to 137.50.

130.06 should be resistance.

TLT:

Major level: 126.56
Minor level: 126.17
Minor level: 125.39
Major level: 125.00 <<
Minor level: 124.61 **
Minor level: 123.83
Major level: 123.44
Minor level: 123.03

The TLT jumped up and closed at 125.30. Two closes above 125.39 and the TLT should test 126.56.

125.20 should be minor support.

GLD:

Major level: 125.00
Minor level: 124.22
Minor level: 122.66
Major level: 121.88
Minor level: 120.32
Minor level: 119.53 <<
Major level: 118.75 **
Minor level: 117.97

Like the TLT, the GLD moved up as well. If closed at 121.31. Target should be to 121.88. And minor resistance is at 122.66.

120.70 should be minor support.

XLE:

Minor level: 69.53
Major level: 68.75
Minor level: 67.97
Minor level: 66.41
Major level: 65.63
Minor level: 64.85 <
Minor level: 63.28
Major level: 62.50
Minor level: 61.72

The XLE is trying to hold the minor 64.85 level. A break under that level and the XLE should continue lower.

64.45 should be minor support. And 65.63 resistance.

FXY:

Minor level: 87.89
Major level: 87.50
Minor level: 87.11 <
Minor level: 86.33
Major level: 85.94 **
Minor level: 85.55
Minor level: 84.77
Major level: 84.38
Minor level: 83.60
Minor level: 83.20
Major level: 82.81

The FXY did get above 87.50, but closed 8 cents under it. The lowe for the day was 2 cents above 87.30.

87.70 is the key short term level on the upside. A break above it and the FXY should head higher. 87.30 should continue to offer support on the downside.

AAPL:

Major levels for Apple are 162.50, 159.38, 156.15, 153.13, and 150.

In the recent sell off, Apple managed to close higher, which is a strongly bullish sign.

It closed at 160.43, within one point of the 162.50 objective.

159.38 should be minor support.

WATCH LIST:

Bullish Stocks: LMT, NOC, HUM, BIDU, STMP, UNH, LLL, RTN, ALGN, AET, AAPL, VRTX, CB, SYK, ACN, RCL, COL, AMT

Bearish Stocks: PANW, JACK, PRGO, WAGE, TEN, SGEN, CAKE, FLS, OMI

Be sure to check earnings release dates.