July 18, 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 - $2.63

RRC Long at $11.85
Total Premium Collected $0.70

RRC Long at $9.20

RIG Long at $8.81
Premium Collected - $1.45

FEYE Long at $17.18
Total Premium Collected $0.80

WDC Long July 19th - $52.50 Call @ $1.34
WDC Short July 19th - $55.00 Call @ $0.34

.........................................................................................

The market saw more selling pressure yesterday. For the day, the S & P 500 closed 19.62 points lower. If closed out the day at 2,984.42.

On yesterday's webinar, I mentioned that the market should head lower if the VIX takes out 13.28. And as it turned out, the VIX ironically, was sitting right on the 13.28 line.

As it turned out, the VIX did break through 13.28 and head higher. It ended up closing at 13.97.

And at that point, the S & P 500 was trading around 3,000. After the VIX broke out, the S & P dropped to a low of 2,984.25. This was a move of about 16 points.

By knowing these levels in advance, you can craft scenarios about what the market should do. And once again, the VIX levels suggested what should happen.

As it turned out the S & P closed at 1% of the daily bar, which suggests that the odds of violating yesterday's low are almost 100%.

And pre open, the S & P is trading about a point lower, so expect a move under yesterday's low right off the open. The question is will the market find support and manage to hold off more selling pressure.

Because the market has confirmed a move up to 3,125, I am still biased for a rally. And with both short term charts bullish, this does help to confirm that.

The question becomes where should support be?

The first level to watch should be the minor 2,978.50 resistance level. This level is around the lower band on the 10 minute chart, which is 2,973.29, so it should be an area to watch to see if buying comes into the market.

The next level under 2,978.50, if it can't hold is the major 2,968.80 level. With the market breaking through this level, a retest often happens. So, this would be a key level.

The lower end of the weekly support area is 2,989 and yesterday closed about 5 points under it.

So, the market would have to reclaim this level to reverse the selling pressure.

And the VIX should help us to determine if the market should reverse. There is resistance at 14.84. If the VIX cannot clear this level, it should head lower. If it does clear 14.84, expect it to head higher.

The resistance level from yesterday's daily bar is in the 2,995 area.

The range for the day was 21.01 points. This was almost equal to the daily average true range, which is now 21.57.

Netflix did report last night and is down about 10% or $38.

Here are the Key Levels for the Markets:

$VIX:

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
Minor level: 14.85 **
Minor level: 13.28
Major level: 12.50 <
Minor level: 11.72

The VIX closed at 13.97 yesterday. The VIX moved up 1.11. this was the first close above 13.28.

This now implies that if the VIX closes above 13.28 today, it should move up to 15.63.

But, as I said above, 14.85 should offer resistance and would have to be cleared to see the VIX head higher.

Once again, the major 12.50 level on the VIX has proven its predictive value.

SPX:

Minor level: 3,164.08
Major level: 3,125.00 <
Minor level: 3,085.95
Minor level: 3,007.85 ***
Major level: 2,968.80
Minor level: 2,929.73 **
Minor level: 2,851.58
Major level: 2,812.50
Minor level: 2,773.45
Minor level: 2,695.35
Major level: 2,656.30

The objective is still up to 3,125. To void this objective, the S & P would need two closes under 2,929.73, which is still 55 points away from the market.

The major 2,968.80 level should offer support. this level is right around the midband on the 30 minute chart, which is 2,966.75. So, it should be strong support.

QQQ:

Major level: 196.88
Minor level: 196.10
Minor level: 194.53 **
Major level: 193.75 < Hit
Minor level: 192.19
Minor level: 189.06
Major level: 187.50
Minor level: 185.94
Minor level: 182.81
Major level: 181.25
Minor level: 179.69

The QQQ closed at 192.20. The close one cent above the minor 192.19 level.

It will need two closes under 192.19 to drop to 187.50.

Minor support is at 190.63 and 190 is the midband on the 30 minute chart, which should be support.

IWM:

Major level: 162.50
Minor level: 160.94
Minor level: 157.81
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

The IWM closed at 154.13. This was the first close under 154.69, which now suggests that if the IWM closes under 154.69 today it should drop to 150.

Yesterday also closed under the midband, which is 154.15. Even though it was only 2 cents, it still closed under this support level.

Watch the midband, because if the IWM cannot regain it, it should head lower.

TLT:

Major level: 134.38
Minor level: 133.60
Minor level: 132.03
Major level: 131.25
Minor level: 130.47 **
Minor level: 128.91
Major level: 128.13
Minor level: 127.74
Minor level: 126.95
Major level: 126.56
Minor level: 126.17
Minor level: 125.39
Major level: 125.00

The TLT closed at 131.99. We expected more movement higher and that is what happened. The TLT closed 1.41 higher on the day.

Watch the minor 132.03 level. Two closes above this level and the TLT should move up to 134.38.

Support should be at 131.25.

GLD:

Major level: 137.50
Minor level: 136.72
Minor level: 135.16 **
Major level: 134.48 <
Minor level: 133.60
Minor level: 132.03
Major level: 131.25
Minor level: 130.47
Minor level: 128.91
Major level: 128.13
Minor level: 127.74
Minor level: 126.95

The GLD closed at 134.58. It was up 2.18 on the day. It reclaimed the upper band.

As I have said before, you tend to get this volatility around the upper band. And because the GLD had traded above the upper band we did expect a retest.

Every time a market clears the upper band, we expect a retest. Either it clear it again or it fails.

The next minor level is 136.72.

XLE:

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
Minor level: 58.60
Minor level: 57.03
Major level: 56.25

The XLE closed at 62.46. The upside is still to 65.63. The XLE closed just under the major 62.50 level. It will have to reclaim this level to move higher. If not, I expect a test of 59.38.

62 is technical support.

The 30 minute has crossed into a downtrend, so I do expect more selling pressure.

AAPL:

Major level: 212.50
Minor level: 209.38
Minor level: 203.13 **
Major level: 200.00 <
Minor level: 196.88
Minor level: 190.63
Major level: 187.50
Minor level: 184.38
Minor level: 178.13
Major level: 175.00

Apple closed at 203.35. The objective for Apple should still be to the 212.50 level.

If Apple does take out 203.13, I would expect support at 200.

Minor support is at 203.13. And technical support is at 203.20

WATCH LIST:

Bullish Stocks: NFLX, LMT, ADBE, FLT, MA, COST, APD, MLM, VRSN, MCD, HD, FB, OLED, HON, V, BABA, DIS, MSFT, WYNN

Bearish Stocks: RTN, USNA, SPR, KEX, NUS, DIS, TUP

Be sure to check earnings release dates.