July 2, 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

CB Long Nov $125 Call for $6.40
CB Short Nov $135 Call for $3.00

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

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Friday you should have added a long term debit spread on OI, if you followed the alert. Risk was limited to under 1% of the portfolio.

Friday, the S & P 500 got as high as 2,743.26, before reversing to close at 2,718.37.

It almost closed at the low for the day.

So, the sell off was almost 25 points. Of course, this price action is bearish.

We were looking to see how price reacted at the 2,742 level because that was the midpoint of the September price bar as of Thursday. Selling off that level was also bearish.

The other price level I mentioned on Friday was 2,719.04, which was the midpoint of the weekly price bar.

So, Friday, the two price levels I mentioned affected the intra day trading. This is why it pays to know the levels on high timeframes.

From last week's weekly price bar, the resistance level is in 2,730 to 2,732 area. Watch the 2,705 level for possibly support.

The June monthly price bar contracted and had a range of only 99 points. With a monthly average true range of almost 122 points, you can see how much the range contracted.

And the June monthly price bar had an almost perfect doji bar. The close should be resistance, which was 2,718. Also, watch to see if the S & P takes out the low, which is 2,691.99.

Pre open, the S & P 500 is trading about 14 points to the downside.

This implies an open around 2,704. Watch to see if the June low holds as support. If it can't, the summer pullback could be deep.

The VIX reversing is the signal to go long the market. So, watch the VIX levels below.

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 16.09. For the day, it was down .76 or 4.51%.

The close was just above just the 16.41 resistance level.

At this point, 15.63 and 14.84 are minor support levels. And on the upside, the 16.41 is the level to watch. If it clears 16.41, it should head higher.

$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

The 2,702.60 level should be minor support. Also, the minor 2,714.80 level should be tested today. An open under it and it should be resistance.

I don't see the S & P 500 breaking under 2,680.70. If it does, it should continued lower.

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 171.65. Watch the minor 170.31 level today. If this a hold, I would expect a reversal to the upside.

On the upside, 171.88 should be resistance. And I don't see the QQQ breaking under 165.63. If it does, look for the QQQ to head lower.

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 163.77. The IWM should test 162.50 and I do expect support at that level.

If it cannot hold, the IWM should head to 160.94. 160.94 is a key level because if the IWM closes under that level for two days, it should drop to 156.

TLT:

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
Minor level: 118.36
Minor level: 117.58
Major level: 117.19

The TLT closed at 121.72. The TLT got as high as 122.50 before closing under that level. We were looking for a move up to 123.44.

The TLT is just above the midband on the daily chart, which is 121.47.

This is within one cent of a minor support level, which is 121.48.

Minor resistance is at 122.66.

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 118.65. The GLD is oversold. Watch the 117.19 level. A break under this level and the GLD should continue lower.

117.97 should be a support level. 119.53 should now 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 75.94. A close today above 75.78 and the XLE should head up to 78.13.

75 should still be support again. And minor support is at 75.39. 76.56 is minor resistance.

FXY:

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 86.47. The objective should now be to 85.94.
86.52 is minor resistance.

86.72 is a key level. And with the FXY dropping under the midband, it should now be resistance. The midband is 87.

AAPL:

Minor level: 188.28
Major level: 187.50
Minor level: 186.72
Minor level: 185.16 <
Major level: 184.38 **
Minor level: 183.60
Minor level: 182.03
Major level: 181.25
Minor level: 179.69
Minor level: 176.56
Major level: 175.00

Apple closed at 185.11. Apple could not close above the 185.16 level. Look for this level to be resistance.

184.38 is minor support.

Short term charts remain bearish. Continue to sell rallies.

WATCH LIST:

Bullish Stocks: BDX, SBAC, CTSH, NTAP, APC, EGN, AVAV, K, DRQ, APA, CRC, MDU, CIEN, TEVA, UNT, CNX

Bearish Stocks: GD, GS, LRCX, ITW, CMI, WBC, UPS, LOGM, SWKS, SINA, WDC, XLNX, AAL

Be sure to check earnings release dates.