July 28, 2017 - 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

DYN Long at $12.55
Premium Collected $0.48

APA Long Oct $47.50 Call at $3.45
APA Short Oct $52.50 Call at $1.10

VIPS Long at $11.96
VIPS Short July 28th $12 Call at $0.30

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

You should have closed out SBH yesterday. And there is one position with calls that expire today. That is the short $12 call on VIPS. If an adjustment is made, you will receive a separate email.

Yesterday, saw volatility enter the market. It is interesting how I keep hearing all the talking heads discuss how the VIX has now become irrelevant and not a useful tool anymore.

I could not disagree more.

We have been discussing the 9.38 level on the VIX for a long time and how this makes me concerns that a major reversal could happen.

The other scenario is if the VIX can close under 9.38 for two days, it could drop even farther.

Regardless, we know the VIX is at historic levels.

At this point, the VIX only closed under 9.38 one day. It has bounced under it, but has managed to close above it.

And yesterday, we had the first spike in the VIX. The low for the day was 9.16 and it jumped up to 11.50, before settling at 10.11.

Is this the end of the bull market?

Not yet. I don't see that scenario at the moment.

I say that for a few reasons. First, for the VIX to head higher, it needs two closes above 10.15. Even with yesterday's spike, it could not manage to close above 10.15.

And the second reason is that short term charts are still in uptrend formations.

This indicates that there is still strength in the markets.

Continue to follow the resistance levels.

Here are the Key Levels for the Markets:

$VIX:

Minor level: 16.41
Major level: 15.63
Minor level: 14.84
Minor level: 13.28
Major level: 12.50
Minor level: 11.72
Minor level: 10.16 **
Major level: 9.38 <
Minor level: 8.60 **
Minor level: 7.03
Major level: 6.25

For the VIX to head higher, it will need two closes above 10.16. I would still expect 12.50 to be resistance.

8.98 is a minor support level. And 10.94 is minor resistance.

$SPX:

Major level: 2,500.00
Minor level: 2,484.38
Minor level: 2,453.12 <
Major level: 2,437.50 **
Minor level: 2,421.88
Minor level: 2,390.62
Major level: 2,375.00
Minor level: 2,359.38
Minor level: 2,328.12
Major level: 2,312.50

2,472.70 is minor support. And I would expect some resistance at 2,484.40. And yesterday's high came within 40 cents of that level.

QQQ:

Major level: 150.00
Minor level: 148.44
Minor level: 145.31 ***
Major level: 143.75 <
Minor level: 142.18
Minor level: 139.06
Major level: 137.50
Minor level: 135.94
Minor level: 132.81

The QQQ reversed strongly, closing down .91, at 143.96. Support is just under the close, at 143.75.

A break under 143.75 and the QQQ should drop to 142. 146.09 is resistance.

IWM:

Major level: 146.88
Minor level: 146.09
Minor level: 144.53
Major level: 143.75
Minor level: 142.97
Minor level: 141.41 ***
Major level: 140.63 <
Minor level: 139.85
Minor level: 138.28
Major level: 137.50

141.80 should be minor support. A close today under 142.97 and the IWM should drop to 140.63.

TLT:

Major level: 126.56
Minor level: 126.17
Minor level: 125.39
Major level: 125.00 <<
Minor level: 124.61 **
Minor level: 123.83
Major level: 123.44
Minor level: 123.03

The TLT closed at 123.16. 122.85 is minor support. And expect resistance at 123.44

GLD:

Major level: 125.00
Minor level: 124.22
Minor level: 122.66
Major level: 121.88
Minor level: 120.32
Minor level: 119.53 **
Major level: 118.75 <<
Minor level: 117.97

The GLD closed at 119.79. 120.32 should be resistance. And I would expect 118.75 to offer support.

XLE:

Minor level: 69.53
Major level: 68.75
Minor level: 67.97
Minor level: 66.41 **
Major level: 65.63 <<
Minor level: 64.85
Minor level: 63.28
Major level: 62.50
Minor level: 61.72

The XLE had its first close above 66.41. A close today above that level and the XLE should test 68.75.

65.82 should be minor support and 66.80 is minor resistance.

FXY:

Minor level: 87.89
Major level: 87.50
Minor level: 87.11
Minor level: 86.33 **
Major level: 85.94 <
Minor level: 85.55
Minor level: 84.77
Major level: 84.38
Minor level: 83.60
Minor level: 83.20
Major level: 82.81

The FXY reversed and closed at 86.49. The FXY should test 87.50 again.

85.94 is minor support. 87.11 is minor resistance.

AAPL:

Major levels for Apple are 153.13, 150, 146.88 143.75, and 140.63.

Apple reversed and closed at 150.56. 150 should be support. A break under this level and Apple should drop to 147.

WATCH LIST:

Bullish Stocks: AMZN, AVGO, BA, BDX, BIDU, NFLX, CELG, MA, UHS, LLY, CTXS, RH, CCL, KMX, RAX, NKE, EXPD, KEYS

Bearish Stocks: IBM, GPC, CVS, DXCM, HOG, SIMO, DKS, EAT, GME

Be sure to check earnings release dates.