December 28, 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.

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As a reminder, all markets are closed next Monday in celebration of New Year's Day. Friday is a full session though.

Light holiday trading continues yesterday. Volumes continues to be low across all major indexes.

Applying technical tools in these types of market conditions does diminish the affect of them. But, that does mean that you short the market.

In fact, a standard rule is to never short a quiet market when it is at a top.

With low volume, the bulls can take it up quickly and forces the shorts the cover.

The S & P 500 closed at 2,682.62 yesterday.

The close was just under the support level from last week's weekly price bar, which is in the 2,684.50 to 2,685.50 area.

The market will have to reclaim the 2,685.55 resistance line to move higher.

Because it is under that level, it is resistance. But, assuming it can clear the level, it would be support.

2,682 should be support from yesterday's daily price bar.

And yesterday's range was 6.73 points, which was slightly higher than Tuesday's range of 4.78.

There was a divergence yesterday with both the S & P 500 and the VIX closing to the upside.

Resistance on the VIX should be at 10.94 and I do not see the VIX clearing 11.72.

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 10.47, 11 cents above the 10.16 level. I would expect a run up to 10.94, but I would also expect resistance at that level.

If the VIX does clear 10.94, I don't see it getting through 11.72.

Support should be at 9.77.

$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

2,673.30 should be support. And if the S & P can reclaim 2,685.50, I would expect a move higher.

Minor support is at 2,678.20 and 2,681.30.

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 156.54. The QQQ is still holding above the 156.25 support level. This level should be support.

If 156.52 is taken out, I would not expect the QQQ to drop further than 155.47.

156.45 is minor support.

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 153.13. It closed exactly on the 153.13 level.

Watch to see if the IWM can hold 153.13. If it can't a drop to 151.56 could happen.

152.73 is minor support.

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 closed at 126.77. The TLT appears to be headed for a retest of 128.13.

Minor support is at 125.78. And minor resistance is at 127.34.

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 took out the 121.88 level, closing at 122.23.

If 121.88 is violated, I would expect a retest of 125, which should be resistance.

122.66 is minor resistance. If it is violated, look for a test of 125.

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 72.36. The XLE hit a high of 72.64 before retreating.

71.88 should be now be support.

The daily chart is inching closer to an uptrend. If the daily moves into an uptrend, I would expect higher highs to follow.

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 84.70. 84.38 is still a major support level for the FXY.

85.16 should be tested. Minor support is at 84.67.

AAPL:

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

Apple closed at 170.60, holding above the low from Tuesday. If Apple can take out Tuesday's high of 171.47, I would expect a retest of 175.
169.53 should be minor support.

WATCH LIST:

Bullish Stocks: NTES, SPY, FDX, PH, FLT, HD, CLX, PLCE, COL, UNP, CAT, DE

Bearish Stocks: JAZZ, RNR, EIX, EPR, AXS, AIV, DISH

Be sure to check earnings release dates.