August 16, 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 closed 25.46 points to the downside yesterday. It closed at 2,818.37.

The intraday range was 25.46 points, which exceeded the daily average true range, which is now 21.53 points.

But, if you measure the close to low relationship, you get 37.47 points. This was due to the bear gap open yesterday.

I mentioned yesterday that you want to ... "Watch how the market reacts today around the 2,829.60 level."

The S & P 500 opened just under that level and could not clear that level and continued to sell off all day.

The market finally found support at the lower extreme band on the 10 minute chart. By the way, this is usually a point of support if the 30 and 60 minute charts are bullish, which they are.

The objective should now be back to the midband on the 10 minute chart, which is 2,840.

Watch this level on a rally. A failure to clear this level and the market should drop again.

Yesterday was also the first close under 2,829.60. This is a key level today as well.

This is because a close under 2,829.60 and the S & P 500 should drop to 2,793.00.

For a further drop not to happen, the S & P 500 would have to close above 2,829.60 today.

And pre open, the S & P 500 is trading about 14 points higher. This would put the open around 2,832, which is about 3 points higher than the 2,829.60 level.

Watch to see if 2,928.60 holds as support. And on the upside, watch the 2,840 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 2,828.76 and for the 60 minute chart it is 2,797.83.

The support area from yesterday is in the 2,815 to 2,823 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 closed at 14.66. Yesterday's high was 16.86, which was within 33 cents of the minor 17.19 level.

This now implies that if the VIX closes above 14.06 today, it should move up to 18.75. A close under 14.06 and the VIX should drop again. So, watch this level today.

Support should now be at 12.50. And minor resistance is at 14.84. 13.28 could offer minor support.

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 2,825 levels.

Watch to see if the S & P 500 can hold 2,829.60.

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 179.23. If the QQQ can hold the 181.25 level, it should head higher.

178.13 should be support. And yesterday's low was 178.12. This should hold today.

If the QQQ can clear 179.69, it should continue higher.

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 166.09. 165.63 should be major support.

If the IWM can clear 166.41, it should head higher.

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 120.84. A close today above 120.70 and the TLT should test 123.44.

120.31 should be 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 111.19. The GLD took out the 112.50 objective.

Officially in free fall.

The GLD broke well under the lower band on the daily chart. The lower band is 113.62.

The GLD is way oversold, but shorting here does not make sense.

A break under 110.94 and the GLD should continue lower.

I think ultimately the GLD drops to 100. It will need two closes under 109.38 and that will confirm the drop.

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 71.91, just 3 cents above the major 71.88 level.

71.88 is a major level for the XLE. Two closes under 71.88 and the XLE should drop to 62.

It is also a two level drop off the last top. So, for the bull move to continue, it would have to hold this level.

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 86.45. A close today above 86.14 and the FXY should test 86.72.

86.33 should offer minor support. Watch the 86.43 level on the upside.

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 210.24. Objective is still to 212.50.

Apple is still above the upper band, which is 208.63.

209.38 should 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.