January 12, 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.

CURRENT POSITIONS:

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

SNAP Long at $15.20
Short Jan 12- $15.50 Call @ $0.31
Premium Collected - $3.55

AMC Long at $15.27
Short January $16 Call @ $0.27
Premium Collected - $2.25

UNIT Long at $17
Short January $17.50 Call @ $0.35

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You should have one open position that expires today, if you followed the alert on SNAP. If you did, you would be short the $15.50 call that expires today.

SNAP is trading under the strike price so it appears the calls should expire worthless this afternoon. However, if an adjustment is required, you will receive a separate email.

As a reminder, all US Markets are closed this coming Monday in celebration of Martin Luther King's Birthdays.

There will be no market update Monday morning, as a result of the Holiday. Enjoy the long holiday weekend!

Yesterday was a strong bullish day, with the S & P 500 closing 19.33 points to the upside. It closed the day at 2,767.56.

This of course, was the first close above 2,753.93. A close today above 2,753.93 and the active objective becomes 2,812.50.

And because 2,753.93 was violated, it should offer support on a pullback.

However, the VIX and the S & P 500 did diverge again. They both closed to the upside once again. This warns us of a possible change in direction.

I do need to mention that the S & P 500 broke through the upper band on its daily chart. The upper band is 2,761.79. The S & P 500 is about 6 points above it.

Both the 30 and 60 minute charts for the S & P 500 remain in uptrends and with this formation, you are better off buying the oversold condition as opposed to trying to short the market.

Also, support should be in the 2,760 area.

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 close at 9.86. 10.16 continues to offer resistance. And expect resistance at 10.55.

9.38 should offer support.

$SPX:

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
Minor level: 2,666.05
Major level: 2,656.30
Minor level: 2,646.53

The minor 2,749 level should continue to offer support.

A close today above 2,753.93 and the objective becomes 2,812.50.

2,758.80 level should offer minor support.

QQQ:

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: 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 163.29. Two closes above 164.06 and the new objective becomes 168.75.

162.89 should be minor support for the QQQ.

IWM:

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
Minor level: 150.78
Major level: 150.00
Minor level: 149.22

The IWM closed at 157.50. A close today above 157.03 and the IWM should test 159.38.

156.26 should be strong support. And 156.64 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 124.31. A retest of 125 is likely. And 125 should be resistance, so watch to see if the TLT can clear this level.

Minor support should be at 123.44.

GLD:

Major level: 128.13
Minor level: 127.35
Minor level: 125.78 **
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

The GLD closed at 125.44. 125 is a key level for the GLD. A straddle could be the strategy at the moment.

A failure and the GLD could drop to 112. A breakout and the GLD could run to 137.

To move lower, the GLD will need two closes under 124.22. To move higher, the GLD will need two closes above 125.78.

XLE:

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
Minor level: 73.83
Major level: 73.44
Minor level: 72.66

The XLE closed at 76.68, breaking through the upper band and the 76.56 level.

The upper band is 75.23. For the XLe to move higher, it will need two closes above 76.95.

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 86.28, closing again above the 85.94 level. The FXY should test 86.72.

85.94 should continue to offer support. If it can't hold, I would expect 85.55 to hold.

AAPL:

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

Apple closed at 175.28, closing back above the 175 level.

Two closes above 175.78 and Apple should test 178.13. 174.61 should be minor support.

WATCH LIST:

Bullish Stocks: AMZN, GOOGL, BIIB, LMT, HUM, DIA, BIDU, HD, FB, AMGN, SWK, LH, DE, VRTX, PANW, NSC, COL

Bearish Stocks: SLG, EPR, HCN DXCM, AIV, HTA

Be sure to check earnings release dates.