January 25, 2019 - MDT Pro Tips A.M.

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 $14.54
Total Premium Collected - $1.65

OI Long Feb $19 call @ $1.70

MDR Long @ $9.31

RRC Long at $11.85
RRC Short Jan 25th - $12.00 Call @ $0.30

FEYE Long at $16.70
FEYE Short Feb 1st - $17 Call @ $0.40
......................................................................................... 

The short $12 call on RRC expires today.  RRC closed yesterday at $10.81, so it is about $1.20 under the strike price.  It does appear that the calls will not be exercised and you will keep the premium you collected and the stock.  Assuming the calls are not exercised, I will look to sell more next week.

The other position that expires today are the options on DIS.  DIS settled yesterday at $110.55, so there is still value to the long calls.  I will look to close these options today.  Expect to see a separate email.

This is one of the those positions where timing on options can hurt you.  I do believe DIS will jump in price, but it most likely will happen after today.

Yesterday again contracted.

The range for the day was only 20.19 points. This was less than one half the daily average true range which is 44.37 points.

And the daily bar ended up being an inside day. The inside day has a lower high and a higher low.

This price action typically leads to an expansion.  Actually, contractions always lead to expansions.

The key price levels to watch for today are the high, close and low.

Respectively, those levels are 2,647.20, 2,642.33, and 2,627.01.  The close is typically support for an inside day.

And usually, price will continue in the direction of a violation of the high or the low.

Pre open, the S & P 500 is trading about 20 points higher.  This projects to an open above yesterday's high.  Look for support at yesterday's high on a pullback.

As it is turning out, the weekly price bar is forming an inside day as well.

The high for the week so far is 2,657.88 and the low is 2,612.86.

Yesterday's close was just above the midpoint of the weekly bar which is 2,635.

And the high of last week's price bar is 2,675.47.

With the projected gap open this morning, a test of last week's high is possible.

Watch to see if last week's high can be taken on a test.

The 60 minute chart for the S & P 500 still remains in an uptrend which does suggest that the market should continue higher. And technical support is at 2,586.

And with bias still to the upside, the question is where should the market go?

I am still biased for a test of the midband on the daily chart which is 2,735.

Continue to monitor the levels as I mentioned above.

Here are the Key Levels for the Markets:

$VIX: 
 
Major level: 25.00 
Minor level: 24.22
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

The VIX continued to drop, closing at 18.89, down 0.63 on the day. Yesterday's low did take out the major 18.75 level.  And the high for the day was 20.25, just 6 cents under the minor resistance level of 20.31 I mentioned yesterday.

A break under 18.75 would suggest that it will be resistance.  And watch the minor 17.97 level.  If the VIX does close under 17.97 for two days, it should drop to 15.63.

SPX: 

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 
Major level: 2,578.10 
Minor level: 2,558.58 
Minor level: 2,519.53 
Major level: 2,500.00 

Yesterday was the second close above the 2,636,75. This level should be support at this point.  And yesterday's high came about 9 points below the major 2,656 level.

The projected gap open should put the market above the 2,656 level.

The gap open should be around 2,662. In addition to yesterday's close as a support level, look for the major 2,656 level to offer support.

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 163.20. The QQQ will still need two closes above 164.06 to move up to 168.75.

Like the S & P 500, the QQQ formed an inside bar yesterday.  

Watch for support at 162.50.

Assuming that the QQQ clears 162.38 this morning, look for support at this level as well.

Technical support is at 159.61.

IWM:
 
Major level: 156.25
Minor level: 154.69
Minor level: 151.56
Major level: 150.00 <
Minor level: 148.44
Minor level: 145.31**
Major level: 143.75 
Minor level: 142.19 
Minor level: 139.06 
Major level: 137.50 
Minor level: 135.94 
Minor level: 132.81 

The IWM closed at 145.47.  The objective for the IWM is still to 150.

With the IWM getting back above 145.31, it should offer support.  And minor support is at 144.53.

140.74 should be technical support for the IWM.

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
Minor level: 117.97
Minor level: 116.41
Major level: 115.63

The TLT closed at  121.11.  This was the first close above 120.70.  A close today above 120.70 implies a move up to 121.88.

120.90 is minor support.  And 121.48 is minor resistance.

120.67 is technical support.

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: 117.97 
Minor level: 116.41 
Major level: 115.63 

The GLD closed at 121.09. The GLD now has two closes under 121.10, so the bias is to the downside.

121.19 is minor resistance.  If the GLD can clear this level, it should bounce.  If not, look for a move lower.

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 62.14. The XLE is again flirting with the major 62.50 level. Watch to see if it can clear it.

61.72 is minor support. And if the XLE can take out 62.60, I would expect a move up to 64.

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 87.10.  Deciding where the next minor move should go.

I am biased to the downside, but the FXY will need to take out the midband on the daily chart.

That level is 86.82 and the FXY is just above it.
 
The FXY needs to clear 87.21 to head higher.

AAPL:

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 
Minor level: 146.88 
Minor level: 140.63
Major level: 137.50

Apple closed yesterday at 152.70.  Biased for a test of 150.  A drop to 150 would be a good area to consider a long.

152.34 is minor support. If Apple cannot hold this level, I would expect a drop to 150.

WATCH LIST:

Bullish Stocks: CMG, REGN, AVGO, AMGB, VRTX, CRM, DXCM, RH, WIX, ROST, NKE, SQ, THS, CIEN, BSX

Bearish Stocks: MTN, LGND, VOD, ORAN

Be sure to check earnings release dates.