January 25, 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:

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Before I begin, I want to thank you for your concern. This has been a difficult period in my life and my family's life.

Monday morning, I received a phone call that my younger sister had passed away. This is not supposed to happen, especially for someone so young.

This is something I don't think I will ever recover from.

But, I need to get myself back into focusing on something other my loss.

Thanks for understanding.

In our last update, which was Monday morning, I mentioned that the odds favored a violation of last week's high before the low. And the market has not disappointed.

For the week, the S & P 500 is up 27.24 points and closed yesterday at 2,837.54.

So, the S & P 500 went from closing last Friday at 2,810.30 or about 2 points under our objective to closing above the level.

And the next upside confirming level is 2,832.03. And the S & P 500 has had three straight days where it closed above it.

This now means that the upside objective is 2,890.60.

And now that the market has cleared the 2,812.50 level, I do believe it sets up a scenario where if the market did pullback, it would rally back to the 2,812 level and bounce around before a larger pullback would occur.

As I have mentioned on multiple occasions, the S & P 500 is trading above the extreme bollinger bands on all its longer term timeframes.

Just because the market had the strength to clear the upper band does not mean it is time to short.

Especially when the S & P 500 continues to hit ts upside objectives, which it has done for quite sometime now.

The shorter term 30 and 60 minute charts also remain firmly in uptrends, so continue to look for short term oversold conditions and go long.

Pre open, the S & P 500 is trading about 8 points to the upside, indicating a higher open.

The only negative for the market at the moment is that for the past two days, both the S & P 500 and the VIX closed to the upside. As you know, this is a divergence.

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 closed at 11.47. The high for the day was 12.19, again under the 12.50 level, which we expected should act as resistance.

A close today above 11.33 and I would expect a retest of 12.50, which as I said, should still be resistance.

10.94 could offer support. Watch to see if it breaks under that level.

$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

The objective now for the S & P 500 should be to the 2,890.60 level.

2,836.90 is a minor support level. And watch the 2,849.10 level on the upside.

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 168.41. The 168.75 level was exceeded.

The next minor level is 170.31. Two closes above that level and the objective should be to 175. 167.19 should be minor support.

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 158.97. The key minor levels at the moment are 160.16 and 158.60.

If the IWM cannot hold 158.60, it could test 156 again. But, I would expect support at that level.

TLT:

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 **
Minor level: 122.27
Major level: 121.88

The TLT closed at 123.04. At this point, I would expect strong resistance at the 125 and 123.44 levels.

However, a bounce off the minor 122.66 level could happen.

Higher levels should offer resistance.

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 128.83. The GLD tested the 128.13 as expected.

Two closes above 128.91 and the GLD should run up to 131.25. It is above the upper band on the daily chart now. The upper band is 128.39.

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 77.70. The objective is for a test of 78.13.

77.34 is a minor support level. And minor resistance is at 78.91.

FXY:

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
Minor level: 86.14
Major level: 85.94

The FXY closed at 87.94. The FXY blew through the 87.50 level.

A close today above 87.70, and the FXY should test 88.28.

87.50 should be a major support level. Watch to see if the FXY an hold 87.70.

AAPL:

Major level: 178.13
Minor level: 177.35
Minor level: 175.78
Major level: 175.00

174.22 should offer support for Apple.

Short term momentum has shifted to the upside and is still bullish.

WATCH LIST:

Bullish Stocks: AMZN, GOOGL, SHW, TSLA, BA, NOC, HUM, FDX, ALGN, GD, RTN, ADBE, CMI, URI, AMGN, AAPL, DE, CAT, MA

Bearish Stocks: SLG, KRC, TSRO, HCN, NUVA, DISH, AIV, BKH

Be sure to check earnings release dates.