July 12, 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 $14.54
Premium Collected - $1.65

BERY Long Sept $50.00 Call at $2.70

OI Long Nov $17 Call for $1.25
OI Short Nov $20 Call for $0.35

DDD Long at $14.60
DDD Short July 13th-$15 Call at $0.25
..........................................................................................

Yesterday, the market sold off 19.82 points to close at 2,774.20. The intra day range for the day was only 15.14 points, but that is only because the S & P 500 had a bearish gap open of 14.02 points.

So the close to close relationship was almost 20 points.

The question now is this the start of a deeper pullback?

At this point, I cannot tell you that. The VIX should tell us.

At the very least, I would expect the VIX to move up to 14.84 as a signal that the VIX should head higher ... and consequently, the markets to continue lower.

The other factors at the moment is that the S & P 500 is still way above support levels.

The support level from last week's weekly price bar is in the 2,732 area. And yesterday's close was still about 40 points above that level.

And short term support levels are at 2,771 and 2,758.80.

And yesterday, the 30 minute chart for the S & P 500 crossed into an uptrend.

This tells us that the short term momentum is shifting to the upside. The midband on the 30 minute chart is 2,752, which should also be a support level.

And the 60 minute chart is very close to crossing into an uptrend.

After the 60 minute chart crosses into an uptrend, momentum will be strongly bullish. And trading to the upside will be the best strategy to profit from the markets.

Pre open, the S & P 500 is trading about 16 points higher.

Tomorrow morning we will get earnings from some major banks.

Continue to monitor the longer term levels for the market.

Here are the Key Levels for the Markets:

$VIX:

Major level: 31.25
Minor level: 29.69
Minor level: 26.56
Major level: 25.00
Minor level: 23.44
Minor level: 20.31
Major level: 18.75 <
Minor level: 17.19
Minor level: 14.06 **
Major level: 12.50 <
Minor level: 10.94

The VIX closed at 13.62. It had the bounce off the 12.50 level.

But, to move higher, the VIX will need two closes above 14.06. 14.06 is still minor resistance and yesterday's high was 14.15.

But, if 14.06 is taken out, I would expect resistance at 14.84.

On the downside, 10.94 should be support.

$SPX:

Major level: 2,812.50 <
Minor level: 2,802.73
Minor level: 2,783.18 **
Major level: 2,773.40 <
Minor level: 2,763.65
Minor level: 2,744.15
Major level: 2,734.40
Minor level: 2,724.63
Minor level: 2,705.08
Major level: 2,695.30
Minor level: 2,685.55
Minor level: 2,666.05
Major level: 2,656.30

Minor support is at 2,771 and 2,758.80.

The market closed just above the major 2,773.40 level, which should offer major support.

QQQ:

Major level: 181.25 <
Minor level: 179.69
Minor level: 176.56 **
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

The QQQ closed at 176.42. Yesterday's low was 175.80, which was 80 cents above the major 175 level.

The 60 minute chart is bullish and the 30 minute is bearish. From a technical standpoint, support should be around 174.50.

IWM:

Major level: 171.88
Minor level: 171.10
Minor level: 169.53 **
Major level: 168.75 <
Minor level: 167.97 **
Minor level: 166.41
Major level: 165.63
Minor level: 164.85
Minor level: 163.28
Major level: 162.50

The IWM closed at 167.11. A close today under 167.97 would suggest a drop to 165.63.

The 30 minute chart has crossed into an uptrend. Technical support should be around 164.00.

166.41 should be short term support.

TLT:

Major level: 125.00
Minor level: 124.61
Minor level: 123.83
Major level: 123.44 <
Minor level: 121.49
Minor level: 120.70 **
Major level: 120.31
Minor level: 119.92
Minor level: 119.14
Major level: 118.75

The TLT closed at 122.42. The objective for the TLT should be up to 123.44.

121.88 should be minor support. A break under this level and I would expect the TLT to continue lower.

GLD:

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: 119.14
Major level: 118.75
Minor level: 118.36 <
Minor level: 117.58 **
Major level: 117.19

The GLD closed at 117.64. Objective should be to 117.19.

And a break under 117.19 would indicate the GLD will head lower.

With the daily chart just crossing into a downtrend, look to sell this rally when it fails. Sounds like good advice now.

XLE:

Major level: 78.13 <
Minor level: 77.35
Minor level: 75.78 **
Major level: 75.00
Minor level: 74.22
Minor level: 72.66
Major level: 71.88
Minor level: 71.10
Minor level: 69.53
Major level: 68.75

The XLE closed at 75.73. Yesterday's high came within 13 cents of the 78.13 level.

Watch to see if the XLE can clear 76.17 today. If it can, it should head back up. If not, look for a test of 75.

FXY:

Minor level: 87.31
Minor level: 86.92
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

The FXY closed at 85.39. The objective is down to 85.16. And yesterday, the FXY came within 20 cents of the objective.

85.94 is major resistance. Biased for a move down to 84.

AAPL:

Major level: 200.00
Minor level: 198.44
Minor level: 195.31
Major level: 193.75
Minor level: 192.19
Minor level: 189.06 **
Major level: 187.50 <
Minor level: 186.72
Minor level: 185.16
Major level: 184.38

Apple closed at 187.88. Watch to see if Apple can hold the 187.50 level.

If it can't, I would expect a drop to 181.25.

186.72 should be minor support.

WATCH LIST:

Bullish Stocks: NFLX, BDX, FLT, FB, VMW, FANG, CNC, DPS, CTSH, NKE, AVAV, LW, APA, ETSY, PFE, SJM

Bearish Stocks: SWK, WBC, NXPI, TSN, WRK, WRK, KMT, LM, BITA, RMBS

Be sure to check earnings release dates.