January 30, 2019 - MDT Pro Tips A.M.

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As we wind down to the close of January, we see that we have now had three consecutive days of range contractions.

With an average true range of 41.50 points, yesterday's range of 19.88 points was less than one half the average.

And this follows the 15.05 range on Friday and the 20.91 points from Monday.

As you know, I always point out contractions.  The reason is that an expansion always follows a contraction.

Actually, I think that predicting an expansion is easier than predicting price direction.

You know the market will expand after a contraction of a series of contractions.  You just don't know when.

And yesterday, the S & P 500 closed 3.85 points lower.  It closed exactly at 2,640.

This was just above the minor 2,636.75 support level.  Actually, the market did trade under 2,636.75, hitting a low of 2,631.05 but was above to recoup the minor level I have been saying should be support.

And pre open, the S & P 500 is trading about 11 points higher.  The DOW is up over 200 points.

So, as I said, the prediction of an expansion is relatively easy to call.

The question after you see a contraction is which direction will the market expand in?

In the case of the S & P 500, I have been saying that we are still biased to the upside.  

One of the reasons for that is because short term intra day charts are bullish.

The odds favor a move higher when short term charts are bullish.

The second reason is that I am biased for a move to the midband on the daily chart.

That price level is 2,733 and yesterday's close was within 100 points of that objective.

Support from yesterday's daily price bar is in the 2,640 to 2,642 area. This support area is right around the weekly support level of 2,642.62. Clearing this level would be bullish.

Apple did report last night and is trading about $7 higher. 

Tesla reports this afternoon after the close.

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 closed at 19.13.  For the day, it was up 0.26 points.

The VIX is trading just above the midband on the daily chart.  That level is 17.29.  For the VIX to head down, it will need to break under this level.  Actually, a break under the midband would pave the way for the S & P 500 to move up to its midband.

For the VIX to head lower, it will have to break under 18.75. 

19.53 should be resistance and support is at 17.97.

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 

The S & P 500 did manage to move below the 2,636.75 support level, but did recover it by the end of the day.

This level should still offer support.

Same as yesterday.

If the S & P 500 can clear 2,656.30, I would expect it to head higher.

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 161.57.  The minor 160.94 level should still offer support.

The QQQ will no doubt get a bounce today with the move up on Apple.

162.50 should be support.  And minor support is at 161.72.

Like the S & P 500, the 60 minute chart for the QQQ is in an uptrend.  Technical support should be at 159.33.

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 146.20.  The objective for the IWM is still to 150.

The IWM will need to clear 147.66 to move up to 150.  Minor support is at 145.70.

And 146 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  121.02.  If the TLT can stay above 120.70, I would expect a move up to 121.88.

At this point, 120.70 should be minor support.  Look for support at 120.70 on a pullback.

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 123.98.  It's inching up to 125.  Yesterday's high came within 1 point of it.

123.44 should be minor support.  And if the GLD can clear 124.22, look for a move to 125.

In the short term, the GLD is overbought.  A pullback is possible. But with the 60 minute chart in an uptrend, I would expect a rally if there is a pullback. 

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 62.49.  Once cent under the major 62.50 level.  Yesterday's high did clear 62.50, but it managed to close just under it.

To move higher, the XLE needs two closes above 63.28.

62.50 should be support.  And minor support is at 61.91.

Biased for a move higher.  If the XLE can trade above 62.50, I would expect support there.

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 close at 87.32.  Deciding where the next minor move should go.   Still biased for the move to the downside.

A break under the minor 87.11 level and the FXY should head lower.

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

That level is 86.81 and the FXY is just above it.
 
Wait for price confirmation in either direction.  A break under the midband would suggest lower prices to follow.  And if the midband holds, I would expect another upleg.

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 154.68.  

As I said yesterday, it is best to stand aside at the moment and wait for earnings.

Apple is getting a push up in the pre open off their earnings.

WATCH LIST:

Bullish Stocks: CMG, REGN, AVGO, WDAY, EW, VRSN, VMW, VRSK, XLNX, CHKP, WIX, YUM, CNI, NKE, SQ, WELL, ZEN

Bearish Stocks: FFIV, WB, DOX, QCOM, SIG, BITA

Be sure to check earnings release dates.