July 16, 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
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DUST Long $4.50
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SNAP Long at $14.54
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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

VALE Long at $13.50
VALE Short July 27th-13.50 Call at $0.21

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If you followed the alert on DDD, you would have been assigned on the $15 calls on Friday. The return was 4.4% for seven days.

Now back to the markets.

The S & P 500 closed out the week at 2,801.31. For the week, the S & P 500 closed 41.49 points higher.

The range for the week was only 36.02 points. Compared to the average weekly true range of 63.27 points, the range for the week was a little over one half the average.

This tells us the market should see an expansion.

And with the close percentage for the week at 91.1%, this tells us to expect last week's high to be violated before the low.

Support from last week's weekly price bar is in the 2,784 to 2,786 area. If the market does pulls back, watch to see if this level holds.

Friday's daily price bar did contract and formed a doji bar. The range for the day was 12.84 points.

Compared to the daily average true range of 24.10 points, the daily range was about one half the average.

So, similar to the weekly range, we should expect an expansion at some point.

The 30 minute chart has already crossed into an uptrend, and the 60 minute chart also just crossed over into an uptrend on the 12th.

So with both short term charts in uptrends, buying against support will be the best strategy.

In other words, buy pullbacks.

The market is approaching the major 2,812.50 resistance level. And Friday's close was within 12 points of the level.

The key will be to see of the market can clear this level again. The first time the S & P 500 took out 2,812.50, it pulled back about 340 points.

So, 2,812.50 is a key level to watch.

And the VIX is now back under the major 12.50 level. This tells us that the VIX is now back to long term support. Continue to follow the levels for the VIX below.

Pre open, the markets are trading slightly higher.

Pre market, the S & P 500 is trading relatively flat.

Earnings continue this week and we will hear from more of the big banks. MS reports tomorrow, before the open. And AXP reports after the close.

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 12.17. With a close under 12.50, I would expect resistance at that level.

If the VIX does clear 12.50, then 14.06 should be resistance.

Minor resistance is also at 13.28.

10.94 is a short term support level and if the VIX breaks under that level, it should head lower.

$SPX:

Major level: 2,841.80
Minor level: 2,829.60
Minor level: 2,805.20 **
Major level: 2,793.00 <
Minor level: 2,780.78
Minor level: 2,756.33
Major level: 2,744.10
Minor level: 2,731.90
Minor level: 2,707.50
Major level: 2,695.30

Minor support should be at 2,795.40. Objective should be back to 2,812.50

And minor resistance is at 2,819.80.

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 179.61. The target for the QQQ should still be to the 181.25 level.

Like the S & P 500, both short term charts are bullish. This suggests that if the QQQ does pullback, it should be an opportunity to go long.

178.13 is minor support.

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 167.42. Friday's high was within two cents of the 168.75 level.

Both short term charts are on uptrends, so look to stay long.

167.19 and 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 122.72. The objective for the TLT should still be up to 123.44 and the TLT is within 60 cents of it.

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

123.05 could offer resistance.

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 117.61. 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. 118.75 should be resistance.

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 76.26. Short term support is at 75.39. Look for a bounce back up to 78.13.

76.56 is minor resistance. If the XLE can clear this level, it should head higher.

Short term support is at 75.78.

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 85.19. The FXY is sitting right on the major 85.16 level.

If the FXY can consolidate at this level for a few days, it could indicate a bottom is forming.

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 191.33. 190.63 should be minor support.

The objective for Apple is to the 193.75 level.

WATCH LIST:

Bullish Stocks: AMZN, GOOGL, HUN, ILMN, SPY, BIDU, BDX, FLT, PANW, FB, MA, SAGE, AMGN, ACN, CXO, WDAY, LOPE, DGX

Bearish Stocks: AVGO, MCD, AMP, KSU, MAN, BG, TSN, AMAT, MET

Be sure to check earnings release dates.