January 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.

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
Premium Collected - $3.24
Short Dec 22nd- $16 Call @ $0.45

AMC Long at $15.27
Premium Collected - $1.98

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

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Today rings in the first trading day of 2018. I hope you had a Happy New Year!

For the year of 2017, the S & P 500 bullish move continued. If you look at an annual price bar for the S & P 500, the range for the entire year was 428 points.

And the low for the year was made in January and the high in December. By definition, in a bull market this is what you would expect.

The midpoint of the annual price bar is 2,472. With a close for the year at 2,673.61, the market could drop 200 points with the bull market still being intact.

The December monthly price bar was also bullish. The range for the month was 68 points. The midpoint for the December monthly price bar is 2,659. This area should provide support on a pullback.

And now scaling down to the weekly price bar, we see that the market closed to the downside. For the week, the market closed 9.73 points to the downside, at 2,673.61. And with market closing at its low, we would expect the low for the week to be violated before the high.

The resistance area from last week's price bar is the 2,676 to 2,683 area.

The light holiday was interuppted on Friday when the market sold off 13.93 points. The range for the day was 18.51 points.

This was after four days when the daily range was less than 7.50 points every day.

This also happened two days after the market had the divergence when both the S & P 500 and the VIX closed to the downside.

So, what does this all mean?

It suggests that January could open with some weakness. But, I would expect the market to find support and the upmove to continue.

Continue to follow the resistance levels.

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 rallied to close at 11.04, above the major 10.94 level.

To move higher, the VIX will need two closes above 11.33.

Support should be at 10.55.

$SPX:

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
Minor level: 2,626.98
Major level: 2,617.20
Minor level: 2,607.43

With a close under 2,685.55 on Friday, a close today under that level and the S & P 500 should test 2,656.

The 2,685 level should offer resistance. For the market to continue lower, it will need to break under 2,669.70.

QQQ:

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 155.76. To move lower, the QQQ will need two closes under 155.47. 156.25 should now be resistance.

155.08 is minor support.

IWM:

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
Minor level: 147.66
Major level: 146.88

The IWM closed at 152.46. Two closes under 152.35 and the IWM should test 150.

151.95 should offer support. 153.13 could offer minor resistance.

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 126.86. A close today above 125.78 and the TLT should test 128.13.

Minor support is at 126.17. And minor resistance is at 127.73.

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: 117.96
Minor level: 116.41
Major level: 115.63

The GLD closed at 123.65. The GLD should test 125. However, 124.22 is minor resistance.

122.66 should be support now. 126.56 could offer resistance.

XLE:

Major level: 73.44
Minor level: 72.66
Minor level: 71.09 **
Major level: 70.31
Minor level: 69.92
Minor level: 69.14
Major level: 68.75
Minor level: 68.36
Minor level: 67.58
Major level: 67.19

The XLE closed at 72.26. 73.44 should be the objective.

72.27 should be now be minor support. Watch to see if the XLEc an reclaim this level. If it can't, it should drop.

The daily chart is inching closer to an uptrend. If the daily moves into an uptrend, I would expect higher highs to follow.

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 85.14 The FXY took out the 85.16 level.

To move higher, the FXY will need to clear 85.35. Minor support should be at 94.96.

AAPL:

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

Apple closed at 169.23, breaking down below the low from Tuesday.

168.75 should be support. And 170.70 should be resistance.

WATCH LIST:

Bullish Stocks: LMT, NOC, GD, LLL, FLT, HD, CMI, SWK, CAT, DE, VRTX, UTX, FANG, CRI, VLO, PFE

Bearish Stocks: JACK, DISH, ABM, AGO, JBL, IMAX, WMGI, SSYS

Be sure to check earnings release dates