February 11, 2019 - MDT Pro Tips A.M.

CURRENT POSITIONS:

GOGO Long at $19.93
Total Premium Collected $1.95
 
ASNALong at $14.20
Total Premium Collected $0.75

DUST Long $4.50
Total Premium Collected $0.70

SNAP Long at $14.54
Total Premium Collected - $1.65

OI Long Feb $19 call @ $1.70

RRC Long at $11.85
Total Premium Collected $0.70

RIG Long at $8.81
RIG Short Feb 15th - $9 Call @ $0.26
.........................................................................................

Friday, I suggested you close the short call position on RRC. This was not going to be a call we would hold until expiration. It was a proxy instead of buying a put. And with a profit of almost 50% of the selling price, I suggested you close it out.

RRC is oversold and the stock bounces off this condition, I will suggest you sell more calls.

Friday, the market closed slightly higher. For the day, it closed to the upside 1.83 points.

It closed at 2,707.88.

The market performed as I suggested it would on Friday. With the short term charts bullish, I expected at least another rally before the market would roll over. And as I said, the most likely scenario is a retest of the midband.

And after the market opened with a bearish gap of 13.69 points, it proceeded to drop to a low 2,681.83.

Once it found support, it rallied the balance of the day to close up slightly. The swing ended up being 26.24 points in about one half the day.

The midband is now 2,730.65. And the market is about 23 points under it. So, a retest is more than likely.

The question is does the market clear it?

I don't know. I can only share what I feel will be the market reactions ... and actions.

And at this point, a retest of the midband is the most probable move. Either one of two things will happen.

The market will clear the midband and head higher. Or it will be repelled and retest the lower band.

As I said the other day, in either event, the move in either direction is about 300 points. So, an opportunity should exist under either scenario.

We also have our resistance levels to help us determine what the market should do.

Even though the market closed slightly higher on Friday, it was the first close under 2,714.88. This would imply that if the S & P 500 closed under this level today, it should drop to 2,656.30.

Another way to look at this is that the S & P 500 should recoup 2,714.88 today in order to head higher.

But, there is still overhead resistance at the midband.

For the day, the Friday daily bar closed at 99% of the bar which puts the odds of violating Friday's high before the low at an extreme level.

Support from Friday's daily bar should be in the 2,695 to 2,700 area.

The weekly bar closed at 45.6% of the weekly bar.

And the range for the week was only 57.15 points. Compared with the weekly average true range of 95 points, last week certainly qualified as a contraction.

With a roughly 50% close percentage, the weekly price bar was also a doji bar.

A doji after a bull move consignify indecision. It can also be a pause before a continuation.

How do we know which one it is?

Price will usually continue in the direction of the violation of the high or the low.

In addition to monitoring last week's high of 2,738.98 and low of 2,681.83, you also want to monitor the close of 2,707.88.

Pre open, the S & P 500 is trading about 11 points higher. This projects to an open around 2,718,  above Friday's high of 2,708.07 which should be support if the market does pull back.

And it puts the market within 12 points of the midband which should be tested if the market continues higher.

Earnings do continue this week. One of the most closely watched companies will be NVDA, which reports Thursday after the close.

Here are the Key Levels for the Markets:

$VIX:

Minor level: 22.66
Major level: 21.88
Minor level: 21.10
Minor level: 19.53
Major level: 18.75
Minor level: 17.97
Minor level: 16.41
Major level: 15.63 <
Minor level: 14.85
Minor level: 13.28
Major level: 12.50

The VIX closed at 15.72. The VIX got as high as 17.63 before selling off the balance of the day.

This was 34 cents under the minor resistance level of 17.97 we have been talking about. It should still be resistance.

The VIX should break under 15.63. And if it does, look for resistance at that level.

The next lower to the downside is 14.85. Two closes under that level the VIX should test 12.50.

SPX:

Major level: 2,812.50
Minor level: 2,792.98
Minor level: 2,753.93
Major level: 2,734.40 <
Minor level: 2,714.88 **
Minor level: 2,675.83
Major level: 2,656.30
Minor level: 2,636.75
Minor level: 2,597.65
Major level: 2,578.10

As I said above, if the S & P 500 closes under 2,714.88 today, I would expect a test of 2,656.

But, the market should open above it. That would suggest that it would offer support on a pullback and negate the bearish scenario.

2,710 should offer support. If that level can't, look for 2,704 to hold as support.

QQQ:

Major level: 175.00
Minor level: 173.44
Minor level: 170.31 **
Major level: 168.75 <
Minor level: 167.19
Minor level: 164.06
Major level: 162.50
Minor level: 160.94
Minor level: 157.81
Major level: 156.25
Minor level: 154.69

Friday, the QQQ closed at 168.56. With an active objective up to 175, I would still expect a rally.

At this point, I would expect support at 165.63. Friday closed just under this level.

The QQQ is very close to the midband which is 169.26. Most likely should violate it today.

167.97 is minor support.

IWM:

Major level: 156.25
Minor level: 154.69
Minor level: 151.56
Major level: 150.00 <
Minor level: 148.44
Minor level: 145.31**
Major level: 143.75
Minor level: 142.19
Minor level: 139.06
Major level: 137.50
Minor level: 135.94
Minor level: 132.81

The IWM closed at 149.85. At this point, the IWM will need two closes above 151.56 to move up to 156. But, it needs to clear 150 to head higher.

The midband is 155.92 and Friday's close was about 5 points below it.

But, like the other major markets, short term charts remain bullish.

149.22 is minor support.

TLT:

Major level: 123.44
Minor level: 123.05
Minor level: 122.27 **
Major level: 121.88 <
Minor level: 121.49 **
Minor level: 120.70
Major level: 120.31
Minor level: 119.92
Minor level: 118.14
Major level: 118.75

The TLT closed at 122.35. This was the first close above 122.27. This would imply that if the TLT closes above 122.27 today, it should move up to 123.44.

122.07 is minor support.

To move lower, it will need two closes under 121.49. 121.29 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: 117.97
Minor level: 116.41
Major level: 115.63

The GLD closed at 124.21. Biased for a drop to 121.88, but it may hit 125 first.

123.83 is minor support. And 125.39 is resistance on the upside.

XLE:

Major level: 71.88
Minor level: 71.10
Minor level: 69.53
Major level: 68.75
Minor level: 67.97
Minor level: 66.41
Major level: 65.63 <
Minor level: 64.85
Minor level: 63.28 **
Major level: 62.50
Minor level: 61.72
Minor level: 60.16
Major level: 59.38

The XLE closed at 62.94. The XLE did drop under 62.50, but managed to recoup it.

62.89 and 62.50 should offer minor support.

And 64.06 should offer minor resistance.

Short term charts remain bullish.

FXY:

Major level: 89.84
Minor level: 89.65
Minor level: 89.26
Major level: 89.06
Minor level: 88.87
Minor level: 88.48 **
Major level: 88.28
Major level: 87.50 <
Major level: 86.72
Major level: 85.94
Minor level: 85.75
Minor level: 85.36
Major level: 85.16
Minor level: 84.97

The FXY closed at 86.91. This is the fifth consecutive day where the FXY is sitting right on the midband which is now 86.79.

The longer the FXY consolidates here, the bigger the move will be when it finally breaks.

You know the implications if the FXY breaks under the midband.

Waiting for a move either way.

AAPL:

Major level: 187.50
Minor level: 184.38
Minor level: 178.13
Major level: 175.00
Minor level: 173.44
Minor level: 170.31 **
Major level: 168.75
Minor level: 167.19
Minor level: 164.06
Major level: 162.50
Minor level: 159.38
Minor level: 153.13
Major level: 150.00

Apple closed Friday at 170.41. A close today under 173.44 and looking for an entry.

WATCH LIST:

Bullish Stocks: CMG, AVGO, WDAY, ZBRA, VRSN, EW, ADP, ADSK, DECK, V, EXPE, VRSK, DG, CHKP, AXP, IRBT

Bearish Stocks: TTWO, ABBV, SNE, BABY, ERJ

Be sure to check earnings release dates.