December 20, 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

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You should have closed your THC position yesterday. The total return on the deal, including the premiums collected, works out to just shy of 20% for two months.

The bulk of the return came from selling call premium, which is why I like this strategy. If THC gives us a decent entry, I will look to put it back on.

Yesterday saw some profit taking in the S & P 500. For the day, the market was down 8.69 points, to close at 2,681.47.

The high for the day was just shy of the 2,695.30 price level.

But, a pullback was not unexpected.

I say that because once again this occurred when both the S & P 500 and the VIX both closed to the upside. This happened on Monday.

And of course, it is no coincidence that this happened when the VIX was at the 9.38 level.

But, as I have been saying, higher levels in the VIX should still offer resistance, which means this sell off should be short lived. In fact, the S & P 500 is trading almost nine points to the upside before the open.

2,687 should be a level to watch intra day. Watch how price reacts around this level.

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 closed at 10.03. The divergence between the VIX and the S & P 500 once again produced a sell off.

To move higher, the VIX will need two closes above 10.16. Butm 10.16 should offer resistance.

And again watch the 9.38 level on the downside.

$SPX:

Major level: 2,734.40
Minor level: 2,724.23
Minor level: 2,705.07
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

Short term support is at 2,673.30 and 2,680.80. Yesterday's loss stopped at 2,680.74, so the short term support level held.

Watch to see if 2,680.7 is tested. I would still expect support there.

And short term resistance could come in at 2,711.20.

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 jumped nicely and closed at 157.70. This now means the QQQ will need two closes above 157.81 to move up to 162.50.

Support should be at 157.81. If the QQQ reclaims this level, I would expect support here.

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 closed at 153.08. It closed back under the 153.13 level.

152.34 should be short term support. If the IWM breaks under 152.34, it could test 150.

If it can clear 153.13, look for a move higher.

TLT:

Major level: 131.25
Minor level: 130.47
Minor level: 128.91 **
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

Since stalling at the 128.13 level, the TLT has been selling off in a big way. It closed at 125.53. 125 should be support. But, a move to 123.44 would not be out of the question now.

126.56 should be resistance.

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 closed at 119.82. This was the second close above 119.63, which implies a move up to 121.88.

I would expect resistance at the 121.88 level. And minor resistance is at 119.92.

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 69.35. 70.31 should be tested.

Watch to see if 69.14 can hold as support.

The daily chart is inching closer to an uptrend.

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 85.04. 85.16 should still be support. Watch to see of this level holds.

84.96 should be minor support. If this level holds, I would expect a move back up to 86. If the FXY breaks under it, a drop to test 84.38 is likely.

AAPL:

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

Apple took out the 175 level we were looking for. It closed at 176.42.

A close today above 175.78 and Apple should test 178.13.

175 should be strong support.

WATCH LIST:

Bullish Stocks: GOOGL, TSLA, BIIB, LMT, BA, DIA, SPY, COST, RTN, LH, ACN, CLX, CAT, JPM, AFL, MSFT, GILD

Bearish Stocks: VMC, JACK, CLB, KEX, CRH, NFX, TDS, CXW, RRC, RDC

Be sure to check earnings release dates.