February 2, 2018 - 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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Yesterday, the S & P 500 close slightly to the downside, at 2,821.98.  For the day, it was down 1.83 points.

The low for the day was 2,812.70, which was a rest of the major 2,812.50 level I mentioned yesterday.

You know the support levels from the January monthly price bar and those are levels you want to watch to see if the market can hold at those levels. Based on the January monthly price bar, I would expect a violation of the high before the low.

Pre open, the S & P 500 is trading about 19 points to the downside.  If the market opened down 19, it would open around 2,802.98.

This would indicate you would want to watch the minor 2,792.98 level.  If the market breaks under this level, it would then be resistance.

But, it is the downside confirming line to 2,734.40 and the first level under 2,812.50.

Often, the next downside confirming line under a major level acts as support on the first test.

A break under 2,792.98 and it sets up a scenario for lower lows.

A couple of major companies reported last evening.

GOOGL is down about $43 pre open and AMZN is trading about $78 to the upside off earnings. 
 
Here are the Key Levels for the Markets:

$VIX: 
 
Major level: 15.63
Minor level: 15.24
Minor level: 14.45 
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 

The VIX closed at 13.37, closing under the minor 14.06 level.  This now sets up a scenario where if the VIX can close under 14.06, it should test 12.50.

Yesterday, the VIX and the S & P 500 closed to the downside, which you should recognize as a divergence.

The upper band on the daily chart is 14.69 and should now be resistance.

With the VIX violating 12.50, it should now be support.

$SPX: 

Major level: 2,890.60 
Minor level: 2,871.08
Minor level: 2,832.03 
Major level: 2,812.50 <
Minor level: 2,792.98 **
Minor level: 2,753.93 
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 

Watch the major 2,812.50 level.  A break under this level and it should become resistance.  This still holds today after a bearish gap.

2,792.98 is the confirming line to the downside. Will most like be tested today.  

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  

The QQQ closed at 167.96, closing the major 168.75 level.  This level should now be resistance.

165.63 should still offer support.  And watch the 167.19 level.  Two closes under this level and the QQQ should test 162.50

Like the S & P 500, short term charts remain bullish.

IWM:

Major level: 162.50
Minor level: 161.72
Minor level: 160.16 
Major level: 159.38 
Minor level: 158.60 **
Minor level: 157.03 
Major level: 156.25 <
Minor level: 155.47
Minor level: 153.91 
Major level: 153.13 
Minor level: 152.35 

The IWM closed at 156.85.  The IWM is testing the 156.25 level.  You should the implication if that level is violated.

If the IWM cannot hold 156.25, I do think 153.13 would hold. 

TLT:  

Major level: 125.00 
Minor level: 124.61 
Minor level: 123.83 
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

The TLT closed at 120.70.  The TLT is within 40 cents of the major 120.31 level.

Higher levels should be resistance and a drop to 118 is the next logical move.

GLD:  

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: 124.22 
Minor level: 122.66 

The GLD closed at 128.07.  The GLD did hit the 128.13 level.

128.80 is the upper band, which the GLD is retesting.  You know the implications for either a violation or failure.

The major resistance line at the moment is 128.13.  Still resistance until violated.

XLE: 

Major level: 81.25
Minor level: 80.47
Minor level: 78.91 
Major level: 78.13 <
Minor level: 77.74 **
Minor level: 76.95 
Major level: 76.56 
Minor level: 76.17
Minor level: 75.39 
Major level: 75.00 
Minor level: 74.61

The XLE closed at 76.62.  The upper band is 76.90.  So, watch this level on a rally.  This set up is similar to the GLD.  Both are retesting the upper band.

74.61 is minor support and if the XLE breaks under 74.22, look for it to move lower.

FXY:

Major level: 89.06
Minor level: 88.87
Minor level: 88.48
Major level: 88.28 <
Minor level: 88.09 **
Minor level: 87.70
Major level: 87.50 
Minor level: 87.31
Minor level: 86.92
Major level: 86.72 
Minor level: 86.53

The FXY closed at 87.78, just under the major 88.28 level, again.  A  test of 87.50 is possible.

A pullback is an opportunity to buy.  87.50 should still offer support.

AAPL:

Major level: 178.13
Minor level: 177.35
Minor level: 175.78
Major level: 175.00
Minor level: 174.22
Minor level: 172.66
Major level: 171.88
Minor level: 171.10
Minor level: 169.53
Major level: 168.75
Minor level: 167.97 
Minor level: 166.41 **
Major level:  165.63

Apple closed at 167.78. Apple did report last night and is down about $2.60 pre open.

A break under 165.63 and that level should be resistance.

WATCH LIST:

Bullish Stocks: AMZN, GOOGL, LMT, BA, SPY, GWW, ALGN, ORLY, NLFX, BDX, LLL, FLT, RTN, DE, VRTX, PANW, CME

Bearish Stocks: SLG, ALK, CHD, SAVE, HA, TLK, 

Be sure to check earnings release dates.