August 21, 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 continued to inch higher yesterday, closing 6.92 points higher on the day. It closed at 2,857.05.

A close today again above 2,854.00 would further confirm the move up to 2,890.60.

And at this point, I would expect support at 2,854. The low yesterday came in at 2,850.62, which was right around Friday's close.

The bearish case at the moment is the fact that yesterday did contract. The range was only 9.14 points. And the average true range is 21.36 points. So, yesterday's move was about one half the average.

The other bearish situation at the moment is that the VIX broke under the major 12.50 level. It closed just under it, at 12.48.

As you know, this is a long term support level should puts us on alert that a bounce in the VIX could happen. And a bounce in the VIX would indicate the market should pullback.

But, at the moment, both the 30 minute and 60 minute charts remain bullish, so I would expect a rally if the market did sell off.

The support level from yesterday's daily price bar is around 2,855. And with the short term resistance level at 2,854, this should be a critical level to watch today.

Pre open, the S & P 500 is trading about 4 points higher. Watch the levels above for support if the market does pullback.

The support area from last week's weekly price bar is in the 2,829 to 2,842 area. With the S & P 500 closing out well above this area, a pullback could be deep without affecting the bull move.

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 12.48. This puts the VIX back to just under the major 12.50 level. And it alerts us to a possible bounce in the VIX.

At this point, I would expect resistance at 13.28. If this level is taken out, then 14.06 should offer resistance.

On the downside, the key level is 11.72. A break under this level and the VIX should continue lower.

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 still up to 2,890.60. The minor 2,849.10 level should offer support.

On the upside, 2,873.50 could offer resistance. Next minor level on the upside is 2,861.30.

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 179.70. Target should still be to 181.25.

Minor support is at 179.30 and 179.69.

Like the S & P 500, both short term charts remain bullish. On the upside, 182.81 could offer resistance.

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 168.82. The IWM closed just above the 168.75 objective.

At this point, I would expect support at the minor 167.97 level. 170.31 could offer resistance on the upside.

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 121.79. The TLT should test 123.44.

121.48 should now offer support.

GLD:

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 <
Minor level: 111.72
Minor level: 110.16
Major level: 109.38

It closed at 112.69. If the GLD stays under 111.72, I would expect it to drop further to 109.38.

The GLD has had two closes under 111.72, so I would expect a drop to 109.38.

The GLD is bouncing, as we expected. Watch to see if it stalls at 113.28.

I would not expect a bounce to exceed 115.63.

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 73.10. A close today above 72.66 and the XLE should test the major 75 level.

71.88 should offer support. And 72.66 should also.

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

The FXY closed at 86.88. The FXY should test 86.72. And the FXY took out the objective by 16 cents.

86.72 should offer support. And on the upside, if the FXY can clear 86.91, it should continue higher.

AAPL:

Major level: 225.00
Minor level: 221.88
Minor level: 215.63
Major level: 212.50 <
Minor level: 209.38
Minor level: 203.13
Major level: 200.00

Apple closed at 215.46. Apple will still need two closes above 215.63 to move up to 225.

Apple is still above the upper band, which is 210.96.

212.50 should be major support. If Apple can hold this level, look for a nove up to $250

WATCH LIST:

Bullish Stocks: CMG, GWW, HUM, SPY, UNH, BDX, FDX, AAPL, CTAS, AMGN, CME, AAP, RH, WDAY, V, DXCM, SODA, UHS, VRSK, LLY, AXP

Bearish Stocks: AVGO, NTES, STZ, BABA, ALXN, ALNY, FMC, XEC, DY, SINA, CTRP, WGO, OSTK, TUP

Be sure to check earnings release dates.