February 21, 2020 - MDT Pro Tips A.M.

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

RRC Long at $11.85
Total Premium Collected $0.70

RRC Long at $9.20

RIG Long at $8.81
Premium Collected - $1.45

FEYE Long at $17.18
Total Premium Collected $1.06

UNIT Long at $6.78
UNIT Short Feb 21st Call @ $0.30

IRBT Long (2) Feb 28th - $52.50 calls @ $2.40
IRBT Long (1) Feb 28th - $52.50 put @ $2.50

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As we close out this week, I did add two positions yesterday. The first was an unequal straddle on ZEN at the $87.50 strike.

This trade is a bias to the downside and anticipates that ZEN will follow through to the downside.

The other trade was a put debit spread on CDAY. CDAY is literally sitting right at its upper extreme bollinger band on its daily chart. I will close the trade if it does break through the upper band.

And there is one position that expires today and that is the short $7.50 call on UNIT.

Since I recommended UNIT on January 27th, it has essentially run straight up.

The calls will no doubt be assigned this afternoon, allowing you to book the profit on the position.

I do not suggest rolling the calls forward. But, I will suggest the trade again after the next pullback.

The return on the trade for about a month will be slightly over 17%.

Yesterday was a large range day in the market.

The intra day range yesterday was 48.13 points. This was 160% of the daily average true range, which is 29.84 points.

This expansion came after six days of contractions. A contraction is a daily range less than the daily average.

I see people trying to explain this. And they have many reasons why the market had such a move. The main culprit being the coronavirus.

But, all you have to do is look at the daily ranges and compare them to the daily average true range. An expansion always follows a contraction.

Even though the S & P closed 12.92 points lower, it did manage to close well above the low. In fact, the day closed at 67% of the daily price bar.

The range from the low to the close was 32 points. And the range from high to low was 48.13 points.

If you add these together, it totals 80 points. This was almost 3 times the daily average true range.

So, if you missed the short, there was an opportunity to catch the bounce.

The question is what is the set up that would of had you buying at the low?

Great question ... and this is exactly what I covered on Wednesday's webinar. You can view the recording in the members area. The presentation is at the end of the webinar, if you are in a hurry.

The difference between yesterday's price action and what I covered Wednesday were the timeframes.

The presentaion Wednesday use the 3 and 10 minute chart.

Yesterday's move used the 10 and 60 minute chart.

The concept is the same. Buy on the lower timeframe if price is at or under the lower extreme bollinger band and the higher timeframe is in an uptrend.

The resistance level from yesterday's daily price bar is in the 3,365.09 area.

Pre open, the S & P is trading about 10 points lower. This would project to an open around 3,363 or about 2 points under the daily resistance level.

Watch to see if price is repelled at the resistance level or can clear it.

In taking a quick look at how the weekly price bar is forming, we see that the range through yesterday is only 52.50 points. This is about 14 points less than the weekly average true range, which is now 66.26.

And the weekly price bar is forming a doji. The week opened at 3,369.04 and yesterday's close was 3,373.23. So, for the week, the close is only 4 points above the open.

The other key price level is the 3,367, which is the midpoint through yesterday.

A close below the midpoint and the open would be bearish. So, watch these levels today.

DPZ and STMP, both had mammoth moves off their earnings.

DPZ was up $76 or 25.6% after reporting. And STMP was up even more. It jumped $62.53 or 65.5%.

This morning, FSLR is set to drop about $8 after reporting and DE is up about $11.

Here are the Key Levels for the Markets:

$VIX:

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
Minor level: 11.72
Minor level: 10.16
Major level: 9.38

The VIX closed at 15.56 yesterday. The VIX got as high as 17.21 before closing just 7 cents under the major 15.63 level.

To move up to 18.75, the VIX would need two closes above 16.41.

At the minimum, to move higher, the VIX will need to clear 15.63.

Technical support is at 14.44.

S & P 500:

Major level: 3,427.40 <
Minor level: 3,398.35
Minor level: 3,320.25 **
Major level: 3,281.20
Minor level: 3,242.15
Minor level: 3,164.08
Major level: 3,125.00
Minor level: 3,085.95
Minor level: 3,007.85
Major level: 2,968.80

The S & P closed at 3,373.23. The S & P dropped under the minor 3,378 level.

Watch this level again today. The S & P should open about 13 points under it and I would expect resistance there on a rally.

Technical resistance is at 3,374. The S & P would need to clear this level to head higher.

Technical support should be at 3,350.

QQQ:

Major level: 237.50
Minor level: 236.73
Minor level: 235.16
Major level: 234.38 <
Minor level: 233.60
Minor level: 232.03
Major level: 231.25
Minor level: 230.48
Minor level: 228.91
Major level: 228.13
Minor level: 227.35
Minor level: 225.78
Major level: 225.00

The QQQ closed at 234.78. To move lower, the QQQ will need two closes under 233.60.

Also, 233.46 is the upper band on the daily chart, which is right around the major level.

Watch to see if this level holds as support. If it can't, the QQQ should head lower.

234.50 is also a key technical level for today.

IWM:

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
Minor level: 151.56
Major level: 150.00

The IWM closed at 168.81. The IWM closed just above the major 168.75 level. This was the first close above this level since January 16th.

Watch to see if this level holds today. To move higher, the IWM will need two closes above 170.31 and to drop, it will need two closes under 167.19.

The 168 area should still offer technical support.

And the IWM did cross into an uptrend on its 60 minute chart.

TLT:

Major level: 150.00
Minor level: 149.22
Minor level: 147.66 **
Major level: 146.88
Minor level: 146.10
Minor level: 144.53
Major level: 143.75
Minor level: 142.97
Minor level: 141.41
Major level: 140.63
Minor level: 139.85
Minor level: 138.28

The TLT closed at 146.67. The TLT already took out the146.88 objective.

The next minor level is 147.66. Two closes above this level and the TLT should test 150.

Not a market to short or consider shorting.

GLD:

Major level: 153.13
Minor level: 152.35
Minor level: 150.78 **
Major level: 150.00
Minor level: 149.22
Minor level: 147.67
Major level: 146.89
Minor level: 146.11
Minor level: 144.54
Major level: 143.75
Minor level: 142.97
Minor level: 141.41
Major level: 140.63

The GLD closed at 152.41. The objective for the GLD should be up to 153.13. And yesterday, the GLD went to within 33 cents of it.

The GLD should take out 153.13 at the open. Watch for support there.

The 150 level should be strong support. And technical support should be around 151.

Momentum remains bullish. But, short term, the GLD is overbought and I would expect a pullback.

XLE:

Minor level: 63.28
Major level: 62.50
Minor level: 61.72
Minor level: 60.16
Major level: 59.38
Minor level: 58.60
Minor level: 57.03
Major level: 56.25
Minor level: 55.47
Minor level: 53.90 **
Major level: 53.12 <
Minor level: 52.34
Minor level: 50.78
Major level: 50.00

The XLE closed at 54.79. Watch the minor 53.90 level. If the XLE cannot hold this level, I would expect a breakdown.

A close above 53.90 would help to confirm a move up to 56.25.

53.78 is a key support level. If this can hold, look for the XLE to continue to bounce. If it can't, look for a further drop.

54.50 should offer technical support.

AAPL:

Major level: 337.50
Minor level: 334.38
Minor level: 328.13
Major level: 325.00 <
Minor level: 321.88 **
Minor level: 315.63
Major level: 312.50
Minor level: 309.38
Minor level: 303.13
Major level: 300.00
Minor level: 296.88
Minor level: 290.63
Major level: 287.50
Minor level: 284.38

Apple closed at 320.30. At this point, if Apple can close under 321.88 today, it should drop to 312.50.

The upper band is 343 and is the level to watch on the upside.

The 315 area should offer technical support on a pullback. And 322 shold be resistance.

WATCH LIST:

Bullish Stocks: AMZN, GOOLG, TSLA, MELI, SHOP, REGN, ADBE, NOW, NTES, LRCX, MA, COST, INTU, NVDA, DXCM, APD, HD, RNG

Bearish Stocks: WAT, EEFT, W, CXO, CHRW, RPD, LNG, NTAP, CSCO, HLF, XEC, RAMP, SINA