July 25, 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.

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FEYE Long at $16.69
FEYE Short July 27th - $17.00 Call at $0.25

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Yesterday the S & P 500 closed almost exactly where it opened. The market opened at 2,820.68 and closed at 2,820.40.

But for the day, the S & P 500 closed 13.42 points to the upside. The move was attributed to the bullish gap open, which was 13.70 points.

So, essentially to capture the bulk of the move, you had to be positioned long on Tuesday. If you are trading intra day, profits were made primarily trading the short side. And this was on a day when the S & P 500 closed 13.42 higher.

As you know, I don't advocate trading against the trend. But, yesterday a pullback after the bullish gap was the logical move.

Why you ask?

Because the market gapped up above the extreme upper band on the 10 minute chart. It continued higher and stalled at 10:30 EST. From there is sold off until it bottomed at around 2:00 EST.

I mention these time periods because you will often see the market reverse at those times.

2:00 is often the time when the bears run out of steam.

If you do trade intra day notice how many times the market will reverse at these times.

Yesterday's high came right it at the price objective, which was 2,829.60. The actually high was 2,829.99, so it cleared the level by 39 cents before pulling back.

Pre open, the S & P 500 is trading about 4 points lower. Follow the support levels below.

Support from yesterday's daily price bar is in the 2,820area.

There are a lot of major market movers reporting this week.

GOOGL reported and ended up closing $47.15 higher. Whirlpool had a massive $21.89 drop off their earnings.

And this morning, IRBT reported and is trading about $13 higher before the open.

Facebook reports after the close tonight. AMZN reports Thursday 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 12.41. Yesterday's high was 13.21, 7 cents under the minor 13.28 level.

This puts the VIX back under the major long term support level.

At this point, the minor 12.30 level should help us determine if the VIX should continue lower. A break under 12.30 and I would expect it to continue down.

On the upside minor resistance is at 12.70.

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 now be at 2,812.50. With a project lower open today, watch to see if this level holds.

If it can't, a drop to 2,800 is possible.

On the upside, resistance is at 2,836.90.

QQQ:

Major level: 187.50
Minor level: 185.94
Minor level: 182.81
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

The QQQ closed at 180.30. The QQQ did hit the 181.25 objective we were looking for. Yesterday's high was 182.05.

At this point, 179.69 should be minor support. On the upside, 184.38 is the level the QQQ has to clear.

Like the S & P 500, both short term charts are still bullish.

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 166.89. A test of 165.63 is possible. And I would expect strong support at that level.

167.19 is the minor resistance level. If the IWM closes under 167.19 today, it should continue down to 165.63.

Both short term charts are still in uptrends, so I would expect another rally after the IWM finds 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 119.68. This now implies that if the TLT closes under 119.92 today, it should drop to 118.75.

120.31 should be resistance. To move higher, the TLT will need to close above 120.31.

With the TLT under the midband, it should be resistance on a bounce.

GLD:

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 <
Minor level: 116.80
Minor level: 116.02 **
Major level: 115.63

The GLD closed at 116.04. The GLD came within 30 cents of the 115.63 level.

A break under the 115.63 level and the GLD should continue lower.

On the upside, 116.41 should still 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 75.50, just 50 cents above the major 75.00 support level.

Support should be at 75. And minor resistance is at 76.17.

FXY:

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
Minor level: 84.97
Minor level: 84.58
Major level: 84.38

The FXY closed at 86.06. If the FXY can close above 85.36 today, it continue up to 85.94.

Watch the 86.33 minor resistance level. If the FXY fails there it could drop to 85.

If it can clear 86.33 it should head higher.

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 193. The high came within 10 cents of the 193.75 objective.

192.19 should offer support. On the upside, if Apple can clear 193.75, it should run up to 195.31.

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

WATCH LIST:

Bullish Stocks: GWW, HUM, COST, FB, SNA, IBM, V, EW, CRI, DIS, GRUB, DATA, DXCM, SQ, DNKN

Bearish Stocks: TSLA, NXPI, SMG, BG, CAH, CTRP, EBAY, TSRO

Be sure to check earnings release dates.