January 26, 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.
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The S & P 500 continues it's slow trek higher, closing at 2,839.25. It closed up 1.71 points on the day.
However, yesterday was the third consecutive day where both the VIX and the S & P 500 closed to the upside. Quite frankly, I cannot ever recall when there has been three straight days of this divergence.
So, this is an anomoly that does make me concerned.
However, with multiple closes above 2,832.03, the upside objective is 2,890.60. So, at this point, the market is about 50 points from the target.
Targeting oversold conditions and buying against support is still the appropriate strategy, even though the market is overbought.
Support from yesterday's dauly price bar is in the 2,840 to 2,843 area.
Pre open, the S & P 500 is trading about 8 points to the upside, indicating a higher open.
Short term intra day charts remain bullish for the S & P 500.
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 11.58. The high for the day waw 12.01, again under the 12.50 level, which we expect should continue to act as resistance.
At this point, I would expect a retest of 12.50. And I would still expect resistance at that level.
On the downside, 10.94 could offer support. A break under that level and the VIX should test 9.38.
$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 2,835 should offer support as well.
With an anticipated open above 2,846.70, watch to see if this level holds as 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
The QQQ closed at 168.35. The QQQ is trying to hold the 168.75 level.
A break under it and I would expect 166.41 to hold as support. On the upside, minor resistance is at 170.31.
The next minor level is 170.31. Two closes above that level and the objective should be to 175.
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 159.03. 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. Same as ysterday.
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 124.05. I mentioned yesterday, that I would expect a bounce off the minor 122.66 level. The low for the day
was 122.80, just 14 above the 122.66 level.
The key now is the 125 level. I would expect resistance there. If the TLT gets through 125, it should head higher.
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 127.97. The GLD closed back inside the upper band on the daily chart. The upper band is 128.49. Watch to see if this holds as resistance.
To move lower, the GLD will need two closes under 127.35.
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 77.09. The upper band is 76.44. A close under the upper band and I would expect a pullback. And a close today under 77.74 and the XLE should test 65.56.
76.97 is a minor support level. And minor resistance is at 78.13.
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 87.81. The 87.50 level should now be support.
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
Minor level: 174.22
Minor level: 172.66
Major level: 171.88
Minor level: 171.10
Minor level: 169.53
Major level: 168.75
Apple closed under the major 171.88 level. At this point, I would expect a test of 168.75 and that level to offer support.
Short term charts still bullish, so a bounce at the minor 170.31 would not be unexpected.
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
