December 14, 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
Total Premium Collected $1.95

ASNA Long at $14.20
Total Premium Collected $0.75

DUST Long $4.50
Total Premium Collected $0.70

SNAP Long at $15.20
Premium Collected - $3.24
Short Dec 22nd- $16 Call @ $0.45

AMC Long at $15.27
Premium Collected - $1.98
Short Dec $17.00 call @ $0.20

THC Long at $14.63
Short Dec $15.50 call @ $0.30
Premium Collected - $1.70

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Yesterday, you should have sold a call against the SNAP position. These are the calls that expire next week. Tomorrow, you should have two short call positions that expire. They are the $17 call on AMC and the $15.50 call on THC.

The S & P 500 is struggling to claim the 2,666.05 level. The market hit a high of 2,671.88, before settling under 2,666.05, to close at 2,662.85.

Yesterday was the second consecutive day that the S & P 500 managed to trade above 2,666.05, but failed to close above it.

As I mentioned yesterday, I did feel that 2,666.05 would be tested again. But, shorting when the market continues too show strength should be reserved for only the experienced. Even considering the fact that we have strategic price levels where we expect a price reaction.

With both the short term 30 & 60 minute charts in strong uptrends, a short is a high risk trade. And you would be better served waiting for the market to come to an area of support and go long, as opposed to shorting.

The question becomes where should support come in?

We still have the support area from last week's weekly price bar, which is in the 2,654 area.

With a close yesterday of 2,662.85, the market is about 9 points of that support price.

In looking at our resistance levels, there is a minor support level2 at 2,650.10 and 2,656.30. The weekly support level happens to fall right between these two support levels.

The timing of a long entry is enhanced when the VIX peaks out and turns down.

The VIX closed out at 10.18 yesterday, after having bounced up from the major 9.38 level.

I am still biased for a reversal in the VIX at the 10.94 level. Though if the VIX cannot clear 10.16, that level may offer resistance as well.

Continue to follow the resistance levels.

Here are the Key Levels for the Markets:

$VIX:

Major level: 14.06
Minor level: 13.67
Minor level: 12.89
Major level: 12.50
Minor level: 12.11
Minor level: 11.33
Major level: 10.94
Minor level: 10.55
Minor level: 10.16
Major level: 9.38 **
Minor level: 8.99 <
Minor level: 8.20
Major level: 7.81

The VIX got as low as 9.65, before rallying back to close at 10.18.

Look for resistance at 10.55 to 10.94. With a close above 10.16, the VIX will need to close under that level today for the VIX to head back down.

The short term 60 minute chart for the VIX has just moved into a downtrend. This suggests more movement to the downside.

$SPX:

Major level: 2,695.30
Minor level: 2,685.55
Minor level: 2,666.05 **
Major level: 2,656.30 <
Minor level: 2,646.53 **
Minor level: 2,626.98
Major level: 2,617.20
Minor level: 2,607.43
Minor level: 2,587.88
Major level: 2,578.10

To move higher, the S & P 500 will need two closes above 2,666.05. Once again, I would expect a retest of this level.

Minor support is at 2,661.

QQQ:

Major level: 162.50
Minor level: 160.94
Minor level: 157.81
Major level: 156.25 **
Minor level: 155.47
Minor level: 153.91
Major level: 153.13
Minor level: 152.34
Minor level: 150.78
Major level: 150.00

The QQQ closed at 155.99. The QQQ did take out the 156.25 level, but closed under it.

To move higher, the VIX will need two closes above 157.81.

IWM:

Major level: 156.25
Minor level: 155.47
Minor level: 153.91
Major level: 153.13
Minor level: 152.35
Minor level: 150.78 **
Major level: 150.00 <
Minor level: 149.22
Minor level: 147.66
Major level: 146.88

The IWM reversed to close at 151.78. A close today above 150.78 and the IWM should test 153.

151.17 should be minor support.

TLT:

Major level: 128.13 <
Minor level: 127.35
Minor level: 125.78 **
Major level: 125.00 <
Minor level: 124.61
Minor level: 123.83
Major level: 123.44
Minor level: 123.05

The TLT closed at 127.33. Still looking for a retest of 128.

126.56 is minor support.

GLD:

Major level: 125.00
Minor level: 124.22
Minor level: 122.66
Major level: 121.88
Minor level: 121.10
Minor level: 119.53 **
Major level: 118.75 <
Minor level: 117.96
Minor level: 116.41
Major level: 115.63

The GLD bounced to close at 119.17. This is not unexpected, as we were expecting a bounce from its oversold short term condition.

To move up to 121.88, the GLD would need two closes above 119.53. Watch to see if the GLD can clear 119.53.

XLE:

Major level: 73.44
Minor level: 72.66
Minor level: 71.09
Major level: 70.31
Minor level: 69.92
Minor level: 69.14 **
Major level: 68.75 <
Minor level: 68.36
Minor level: 67.58
Major level: 67.19

The XLE closed at 69.49. 70.31 should be the objective.

Short term momentum has shifted to the upside. 69.14 is a short term support level. If 69.14 cannot hold, I would expect 68.75 to.

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: 84.96 **
Minor level: 84.55
Major level: 84.38 <<

The FXY closed at 85.34, moving up .79 on the day. We had been anticipating a bounce off the major 84.38 level and yesterday, we got it.

A close tody above 84.96 and the FXY should test 85.94.

84.96 should be minor support.

AAPL:

Major levels for Apple are 175, 171.88, 168.75, 165.63, 162.50, and 159.38.

Apple closed at 172.27. Biased for a test of 175.

171.88 should now be support. Yesterday's low was 12 cents above that level. 171.88 should still offer support.

WATCH LIST:

Bullish Stocks: BA, LMT, FDX, FLT, AET, MCD, BLUE, SAGE, WYNN, CLX, CAT, CBOE, UTX, CRI, RH, RL, PSX, VLO

Bearish Stocks: AGN, XEC, EOG, CRUS, APC, APA, NFX, AKR, PI, CXW, WU, FNSR

Be sure to check earnings release dates.