August 15, 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.

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The S & P 500 reversed yesterday, to close at 2,839.96, up 19.03 points on the day.

Once again, we had confirmation for a move higher and with profit taking coming into the market, the question then became this ... where should the profit taking stop?

Well, as I have said on a few other occasions, when the market takes out a major level, it usually stops at the minor level under that level.

The levels I am talking about are these.

The major level recently violated was 2,841.80. Then the market had two closes above the next minor level to the upside, which is 2,854.00. The S & P 500 actually had three closes above 2,854.

This puts the upside objective to 2,890.60.

After pulling back, the market dropped to 2,819.88. This was about 10 points under the minor level under 2,854, which is 2,829.60.

And yesterday's low was 2,826.58, which was about 3 points under the minor support level.

The key here is to have a general idea as to where the market should go. And where support should logically come in.

This morning, before the open, the S & P 500 is trading about 14 points lower.

This is not too surprising because the S & P 500 did take out 2,829.60, which suggests that the market should test it again.

And with a projected open about 14 points lower, the market should open just under it.

Watch how the market reacts today around the 2,829.60 level.

The short term 30 and 60 minute charts still remain bullish. The technical levels to watch are the midbands on both charts. The midband for the 30 minute chart is 2,828.67 and for the 60 minute chart it is 2,795.93.

The support area from yesterday is in the 2,833 to 2,835 area.

The support area from last week's weekly price bar is in the 2,836 to 2,845 area.

Continue to monitor the longer term levels for the market.

Here are the Key Levels for the Markets:

$VIX:

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 **
Minor level: 7.81
Major level: 6.25

The VIX got as high as 15.02 on Monday, before dropping to close at 13.34 yesterday.

The VIX still has not had two closes above 14.06, which is what it would need to move up to 18.75.

Support should now be at 12.50. And minor resistance is at 14.84.

SPX:

Major level: 2,890.60 <
Minor level: 2,878.40
Minor level: 2,854.00 **
Major level: 2,841.80 <
Minor level: 2,829.60 **
Minor level: 2,805.20
Major level: 2,793.00
Minor level: 2,780.78
Minor level: 2,756.33
Major level: 2,744.10

Target is up to 2,890.60. Look for support at the 2,812 and 2,800 levels.

A break under 2,800 and the S & P 500 could drop to 2,751. But it would need two closes under 2,788.10 to confirm that.

QQQ:

Major level: 187.50
Minor level: 185.94
Minor level: 182.81 **
Major level: 181.25 <
Minor level: 179.69
Minor level: 176.56
Major level: 175.00
Minor level: 173.44
Minor level: 170.31
Major level: 168.75

The QQQ closed at 181.45. If the QQQ can hold the 181.25 level, it should head higher.

A break under that level and it could drop to 175, which should be strong support.

Like the S & P 500, both short term charts remain bullish.

IWM:

Major level: 171.88
Minor level: 171.10
Minor level: 169.53
Major level: 168.75 <
Minor level: 167.97
Minor level: 166.41 **
Major level: 165.63
Minor level: 164.85
Minor level: 163.28
Major level: 162.50

The IWM closed at 168.20. The IWM 15 cents of the 168.75 objective.

167.19 should be minor support. 170.31 could offer minor resistance on the upside.

And 162.50 should be major support.

TLT:

Major level: 123.44
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
Minor level: 117.58
Major level: 117.19

The TLT closed at 120.14. The TLT did hit the 120.31 objective. A

To move higher, the TLT will need two closes above 120.31. And to move lower, it needs two closes under 119.92.

119.14 is minor support.

GLD:

Major level: 118.75
Minor level: 118.36
Minor level: 117.58
Major level: 117.19
Minor level: 116.80
Minor level: 116.02
Major level: 115.63
Minor level: 114.85 **
Minor level: 113.28
Major level: 112.50 <

The GLD closed at 113.07. The objective should be down to 112.50. And the GLD is within 34 cents of it.

113.28 should be resistance. And 110.94 should be support.

114.26 is minor support.

XLE:

Major level: 78.13
Minor level: 77.35
Minor level: 75.78
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

The XLE closed at 74.51. To move lower, the XLE will need two closes under 74.22.

75 should still be support, until it is violated. Now resistance.

At this point, a drop to 73.44 is expected.

FXY:

Major level: 86.72
Minor level: 86.53
Minor level: 86.14 **
Major level: 85.94
Minor level: 85.75
Minor level: 85.36
Major level: 85.16
Minor level: 84.97
Minor level: 84.58
Major level: 84.38

The FXY closed at 86.02. Yesterday's low was one cent above the major 85.94 level.

A break under 85.94 and the FXY should head lower.

85.74 is the next minor level to watch. A break under that level and a drop to 85 would be expected.

AAPL:

Major level: 212.50
Minor level: 211.00
Minor level: 208.00 **
Major level: 206.25
Minor level: 204.88
Minor level: 201.63
Major level: 200.00
Minor level: 198.44
Minor level: 195.31
Major level: 193.75

Apple closed at 209.75. Apple now has had two closes above 208, which suggests a move up to 212.50.

Apple is still above the upper band, which is 207.99.

207.81 should still be minor support. Short term charts remain bullish.

WATCH LIST:

Bullish Stocks: AMZN, GOOGL, CMG, HUM, NVDA, AET, ZBRA, WDAY, FANG, GRUB, SODA, PSX, VLO, CTXS, NTAP

Bearish Stocks: BIDU, NTES, BABA, ALXN, SWKS, CBOE, LAD, SMG, SINA, AABA

Be sure to check earnings release dates.