August 16, 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.

CURRENT POSITIONS:

GOGO Long at $19.93
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DUST Long $4.50
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DYN Long at $12.55
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APA Long Oct $47.50 Call at $3.45

WDC Long Aug 18th-$82.50 call at $1.44

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Yesterday, the market paused after the bullish gap from Monday. The market closed slightly to the downside, at 2,464.61.

For the day, the S & P 500 was down 1.23 points. And the range for the day was only 7.29.

But, critical is the fact that the S & P 500 closed above 2,453.12 for a second consecutive day. This now means that the objective is back to 2,500.

The high for the day was 2,468.90, just 10 cents above the minor level of 2,468.80, I mentioned yesterday.

Pre market, the S & P 500 is trading about 4 points to the upside, which should mean that 2,468.80 should offer support.

The short term 60 minute chart for the S & P 500 is still in an uptrend, but the 30 minute chart is downtrending.

On the 30 minute chart, price is trading just under the mid band, which is 2,470.57. Price has to clear this level to continue higher.

The recent spike in the VIX is another example as to why you want to book profits on long positions on the spike.

Since topping out at 17.28 on Friday, the VIX is now back under 12.50.

That is a drop of 30% in only three days.

The VIX did manage to get above the upper band levels on its short term charts, which makes me believe we will see another rally attempt.

The question is when.

Today at 2:00, we get the release of the FOMC minutes.

Earnings continue this week and will be closely followed.

Continue to follow the resistance levels.

Here are the Key Levels for the Markets:

$VIX:

Major level: 18.75
Minor level: 17.97
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 <

With the VIX back under 12.50, that level should now be resistance. If it does get above 12.50, I would expect resistance at 14.06.

10.94 is still the minor level on the downside. Two closes under 10.94 and the VIX should drop to 8. (And possibly to 6.25, which would be historic.)

$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: 2,375.50
Minor level: 2,359.38
Minor level: 2,328.12
Major level: 2,312.50

The objective is now back up to 2,500 again. Support should now be at 2,460.90.

Based on the move off the bottom, I would expect another rally if the market does pullback.

Watch the minor levels I mentioned above.

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

143.75 should now offer support. If the QQQ does break under 143.75, I would expect 142.97 to act as strong support.

144.53 could offer minor resistance. If the QQQ can clear this level, expect the QQQ to head higher.

IWM:

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 <
Minor level: 136.72
Minor level: 135.15
Major level: 134.37

The IWM sold off and closed 10 cents under the major 137.50 level. Watch to see if the IWM can get back above this level. If it can, it should be support.

If it cannot clear this level, watch the 135.94 level. Two closed under 135.94 and the IWM would drop to 131.

To move higher, it will now need two closes above 138.28.

TLT:

Major level: 128.13
Minor level: 127.74
Minor level: 126.95
Major level: 126.56 <
Minor level: 126.17 **
Minor level: 125.39
Major level: 125.00
Minor level: 124.61
Minor level: 123.83

The TLT gapped down and hit the 125 level. It will need to clear 125.39 to move higher.

125 should be major support, so if it breaks under that level, it should head lower.

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 gapped down and close at 120.89

119.53 should offer support. To move lower, the GLD will need two closes under 120.32.

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

62.50 should be the objective for the XLE. To move higher, the XLE will need to close above 63.67 today. Watch this level today.

64.06 should continue to be minor resistance.

FXY:

Major level: 89.06
Minor level: 88.67
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

The FXY has a massive bear gap, closing down .72, at 86.98 yesterday.

If the FXY closed under 87.11 today, it should drop to 85.94.

86.33 should now be minor support.

AAPL:

Major levels for Apple are 162.50, 159.38, 156.25, 153.13, and 150.

Apple is now within 30 cents of the 162.50 objective. 165.33 should offer minor resistance.

Minor support should be at 160.16 and 159.38.

WATCH LIST:

Bullish Stocks: LMT, RTN, ALGN, COL, KITE, EL,DG, WEC, AZPN, GRUB, ERJ, MFA

Bearish Stocks: PANW, IBM, FLT, PANW, BWLD, CLB, VRSK, ESRX, WES, PAYX, AKAM, SGEN, LB, FLR

Be sure to check earnings release dates.