December 21, 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

UNIT Long at $17
Short January $17.50 Call @ $0.35

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You should added UNIT yesterday. I did not mention a position size based on the nominal portfolio, but trade size has been 400 shares as of late.

This works out to a 6.8% investment based on the nominal portfolio. As the market continues to climb, I find it is important to limit trade size.

There is one open position that expires tomorrow and that is the short $16 call on SNAP. I will send a separate email if any adjustments are required.

Yesterday saw continued profit taking in the S & P 500. The market closed at 2,679.25, down 2.22 for the day.
The S & P 500 has had two closes under 2,685.55, so a retest of 2,656.30 is possible.

I would expect strong support at 2,656.30 and bounce if the market does retest that level.

The key, as always, will be to see if the VIX turns down. That would be the indication that the markets should bounce.

And once again, the divergence between the S & P 500 and the VIX preceded this little pullback this week.

The VIX did actually break under the 9.38 level. Yesterday's low on the VIX was 8.90. But the VIX did recuperate and closed above 9.38, at 9.72.

A break under 9.38 does not surprise me. And I do feel at some point, the VIX will go even lower.

But, at this time, every time the VIX gets to 9.38, it does bounce.

This becomes a warning about a possible pullback in the markets.

Having said that, higher levels in the VIX should continue to offer resistance.

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

To move higher, the VIX will need two closes above 10.16. But, I would still expect 10.16 to offer resistance.

If 10.16 is taken out, 12.50 should be strong 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 2,674.60 and 2,680.80. 2,684 a a level to watch intra day. Pre open, the S & P 500 is trading slightly higher and should open around right around the 2,684 level.

Watch to see if the market can hold 2,684.

And short term resistance could come in at 2,711.20. Short term momentum remains bullish.

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 157.53. The QQQ will still need two closes above 157.81 to move up to 162.50.

Support should be at 157. If the QQQ reclaims 157.81, 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 153.38. It closed back above 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

The TLT continues to slump. It closed at 124.14, down 1.39 on the day.

This now suggests that if the TLT closes under 124.61 today, a drop to 123.44 is possible.

125 should be resistance. And 121.88 is 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 closed at 120.14. This was the second close above 119.63, which implies a move up to 121.88.

I would expect resistance at the 121.09 level. And minor support is at 119.14.

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 70.33, two cents above the 70.31 level. We expected 70.31 to be tested.

69.92 should be minor 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 84.62. The FXY broke un the 85.16 support level.

This now implies that if the FXY closes under 84.96 today, it should retest 84.38.

A break under 84.57 and the FXY should head lower.

AAPL:

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

Apple broke under 175, closing at 174.35 yesterday. Apple would need two closes under 174.33 to test 171.88.

If Apple can hold 174.33, I would expect it to bounce.

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.