August 28, 2018 - MDT Pro Tips A.M.

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As we move to close out the month of August, we see that once again our upside objective has been achieved.

But, I suspect you anticipated that.

After all, the market has been hitting its objectives all the up.

As a refresher, the target we were looking for was 2,890.60. And yesterday closed out at 2,896.74. So, not only did the S & P 500 hit its objective, it took it out by about 7 points.

The fact that 2,890.60 was hit does not surprise me. What does surprise me is the speed that is was achieved. If you think about it, the S & P 500 hit a low of 2,802.49 on August 15th.

And here we are, just eight days later hitting a high of 2,898.25. That was a move of almost 100 points in eight days.

With the market trading at these levels, I suspect we need to now adjust to the fact that the swings will be large. That means both and down. And the next time we get a sell off and you hear that it could be the end of the bull market, just remember that we should expect large swings. And they will be swift on sell offs.

Speaking of sell offs, does that mean this bull run is over?

No, I don't think so. But with the VIX so low, I would expect profit taking could happen.

But with the S & P 500 clearing the 2,890.60 level, I would expect a retest of that level if the market does sell off.

The next level is 2,939.50 and follows below for the confirming levels.

The level after 2,939.50 is 2,988.30. And I would expect strong resistance at 2,988.30, assuming the S & P 500 can clear 2,939.50.

Both short term 30 minute and 60 minute charts remain bullish, but price is up against the upper bands on both charts. The upper band on the 60 minute chart is 2,901.21 and on the 30 minute is 2,902.38.

This warns us that for the short term, price is hitting an extreme.

We will resume our regular webinar this week. If you have any questions or a topic you would like me to address, please email me at davismdt@gmail.com and I will address it on the webinar.

Pre open, the S & P 500 is trading about 4 points higher.
Continue to monitor the longer term levels for the market.

Support from yesterday's daily price bar is in the 2,890 to 2,892 area.

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 12.14. The VIX is still under the major 12.50 level, but with both the S & P 500 and the VIX closing to the upside, we get a divergence that warns us for a possible short term top.

Yesterdays high was 2 cents under the major 12.50 level. At this point, I would still expect resistance at 12.50 and at 13.28.

We are still looking for a retest of 11.72. And the key will be if the VIX can close for two days under it.

If it does, the VIX could retest 9.38.

12.70 is also a minor resistance level.

SPX:

Major level: 2,939.50
Minor level: 2,927.28
Minor level: 2,902.83 **
Major level: 2,890.60 < Hit
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

Target hit! The next minor level on the upside is 2,902.83. Two closes above that level and the S & P 500 should test 2,939.50.

Short term intra day 30 and 60 minute charts are still bullish. Technical support is at 2,848.

Short term support level is at 2,878. Watch 2,902 on the upside.

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 184.34. To continue higher, the QQQ will need two closes above 182.81. And yesterday, we got the first close above it.

183.20 should be a short term support level. 185.16 could offer resistance.

IWM:

Major level: 175.00
Minor level:174.22
Minor level: 172.66
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

The IWM closed at 171.84. The IWM did take out our objective of 171.88, but could not close above it.
Minor support should be at the 171.48. 172.66 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 121.59. Objective is still to the 123.44 objective.

121.48 should offer support. And 121.88 minor resistance.

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 114.59. The GLD continues to bounce off its oversold condition.

On the upside, the key level will be 115.63. If the GLD can break through it, it could continue higher. 112.50 should now be 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 75.09. If the XLE can move above 76.56, I would expect it to continue higher.

Minor support should now be at 74.80.

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 86.12. To move higher, the FXY will need two closes above 86.14.

86.04 should offer support, and at 85.94.

Short term charts are bullish, so momentum is to the upside. But technical resistance is at 86.18. The FXY will need to clear this level to move 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 217.94. Target should now be up to 225.

216.41 is a minor support level. On the upside, Apple needs to clear 218.75 level to head higher.

WATCH LIST:

Bullish Stocks: AMZN, CMG, ILMN, ANET, DPZ, SPY, NVDA, UNH, BDX, PANW, ZBRA, WDAY, V, SODA, RHT, GRUB, SPLK, DECK, DG, NTAP,

Bearish Stocks: AVGO, BABA, ITW, SMG, HIG, AMAT, CPB, BECN, JD, WRK, AN

Be sure to check earnings release dates.