February 28, 2019 - MDT Pro Tips A.M.

CURRENT POSITIONS:

GOGO Long at $19.93
Total Premium Collected $1.95
 
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RRC Long at $11.85
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RIG Long at $8.81
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Short March 1st - $9 Call @ $0.20

FEYE Long at $17.18
FEYE Short March 8th - $17.50 Call @ $0.30
........................................................................................

Yesterday, the market continued its slow trading. I say this because yesterday was the 20th consecutive day where the daily range did not exceed the daily average true range.

The range for the day was 20.63 points, as compared with the daily average true range of 26.78 points.

However, the market managed to close slightly lower. For the day it was down 1.52 points. It closed at 2,792.38.

After closing above the minor 2,792.98 level on Monday, we have now had two consecutive days where it closed just under it.

Having said that, the S & P 500 is still trading above the midband on its daily chart which is 2,734.65. But, we have had two closes under the minor 2,792.98 level which would indicate a drop to 2,734.40.

And with the support level right at the midband, I would expect strong support there.

The market did manage to rally back after dropping to a low of 2,775.13. So, after hitting the daily low, the market managed to rally back about 20 points to close at 84% of the daily bar.

This does put the odds of violating yesterday's high before the low at over 80%.

But, I don't believe the market moves higher until it can clear the minor 2,792.98 level.

I also mentioned on yesterday's webinar when the VIX was trading above 15.63 that the market would not move higher until it dropped under that level.

As it turned out, the VIX peaked out at 16.17 before pulling back under 15.63. This turn coincided with the bottom in the S & P 500 yesterday.

It is nice to be able to read the VIX to help time the market.

The support level from yesterday's daily bar is in the 2,785 to 2,790 area.

And the weekly support level is around 2,780.

Pre open, the S & P 500 is trading about 4 points lower. Assuming this trading holds up until the open, the market should open in the daily support area.

BKNG reported last night and is trading to the downside $181.13. On a percentage basis, it is down 9.5%. SQ is off about $5 after reporting last night.

This afternoon we will hear from WDAY and SPLK.

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 14.74 yesterday. It ended up closing under the minor 14.85 level.

This now suggests that if the VIX closes under 14.85 today, it should drop to 12.50.

Resistance should still be at the higher levels, most notably the 15.63 level or the short term 15.23 level.

If the VIX takes out 15.23 and breaks back under it, look for the market to head higher. If it holds as support, the pullback may last a bit longer.

15.63 and 15.23 should offer resistance. And on the downside, 13.28 should offer 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: 2,714.88
Minor level: 2,675.83
Major level: 2,656.30
Minor level: 2,636.75
Minor level: 2,597.65

2,773.40 should offer minor support. And 2,778 should offer technical support.

Both the 30 minute and 60 minute charts remain in uptrends which suggest that buying against support is still the viable strategy.

And watch the daily levels mentioned above.

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

The QQQ closed at 173.59 yesterday. It now came to within 20 cents of the objective. For the day, the QQQ closed 0.11 points lower.

Like the S & P 500, both the 30 & 60 minute charts remain firmly bullish.

171.88 and 172.66 should be minor support levels. And technical support is around 172.

IWM:

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
Minor level: 148.44

The IWM closed at 157.32. The objective should be up to 162.50.

The close was literally right on the midband which is 156.27. As you know, this should be support and if it is taken out, I would expect a pullback.

156.25 is also a support level. And if this does not hold, a drop to 153.13 would be expected.

Both the 30 and 60 minute charts remain strongly bullish.

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 120.43. The TLT dropped to 120.31. A break under 120.31 and the TLT should continue lower.

Minor support should be at 119.92.

Technical resistance is in the 121 area as well.

GLD:

Major level: 128.13
Minor level: 127.74
Minor level: 126.95
Major level: 126.56
Minor level: 126.17
Minor level: 125.39
Major level: 125.00
Minor level: 124.22 **
Minor level: 122.66
Major level: 121.88
Minor level: 121.10
Minor level: 119.53

The GLD closed at 124.69. The next key level to the downside it 124.22. Two closes under this level and the GLD should drop to 121.88.

With a break of 125, it should now be resistance.

124.71 is a support level. Watch today how the GLD reacts at this level.

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 65.91. The XLE continues to flirt with the 65.63 level. Watch how the XLE reacts here.

62.50 should offer major support. Technical support is around the 65 area. Short term charts remain bullish.

If the XLE breaks under 65.63, short term support is at 65.43.

Both the 30 & 60 minute 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 85.94. It dropped 0.34 on the day.

And 86.52 should now offer minor resistance. And it is possible the FXY could retest the midband on the daily chart which is now 86.67. I would still expect resistance there.

A break under 85.79 and expect the FXY to head lower.

Short term charts remain bearish. And the daily chart is also bearish. This would suggest strong resistance at the 86.20 level.

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

Predicted High: 176.80
Predicted Low: 172.94

Apple closed yesterday at 174.87. Yesterday's high stopped exactly at the 175 level which was the objective we were looking for.

I'm certain you are not surprised that 175 was hit.

Both the short term 30 and 60 minute charts remain bullish.

176.56 should offer some resistance.

172.66 should offer technical support.

WATCH LIST:

Bullish Stocks: ULTA, COST, ZBRA, WDAY, VRSN, CMI, CRM, V, OLED, CRL, CHKP, KMB, DATA, DIS, HSY, PYPL, UAL

Bearish Stocks: NTES, AGN, ALNY, GDOT, KSS, XPO, URBN

Be sure to check earnings release dates.