July 31, 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

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The $12 calls on VIPS were in the money at Friday's close, therefore they should have been assigned and your stock was sold at $12.

This was not a huge win, but it does work out to a gain of 2.84% for eight days.

And quite frankly, with the rates that banks pay these days, I would do this deal every week if I could.

But, you do need to be paying nominal transaction fees. I do realize that some people trade through houses where profit on a deal like this would be greatly reduced due to high minimum commissions on options, and stocks.

In that case, you need to assess what your profit would be if assigned and decide if the trade is warranted.

Personally, I trade through Interactive Brokers (IB). And quite frankly, on this deal I would have even made money on the assignment of the calls, not to mention benefiting from selling the calls.

I have mentioned IB before and I don't want to sound like a shill for them, but I find their commission structure to be one of the best in the business.

And there, I mentioned them again.

Onto the markets.

Today of course, is the last trading day for July. As it is shaping up, the S & P 500 should close to the upside for the month. Through Friday, the S & P 500 is up 48.69 points for the month.

The midpoint of the monthly price bar at this point is 2,446. The S & P 500 would have to close under that level today for the monthly bar to turn bearish. Pre open, the S & P 500 is set to open slightly higher, so it would have sell off about 30 points today for the monthly price bar to turn bearish.

Last week, the S & P 500 closed slightly to the downside. It closed at 2,472.10, down .44 for the week. The weekly price bar formed a narrow range doji. This tells us to expect an expansion.

Support from last week's price bar is at 2,472, which about the close. The high for the week was 2,484 and if it is violated, expect the move up to continue.

Short term charts for the S & P 500 remain bullish, so I do expect more movement to the upside.

Earnings continue this week and should be front and center. We also get non farm payroll this Friday at 8:30 EST.

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

The VIX did close above 10.16 on Friday. A close today above that level and the VIX should test 12.50. I would still expect 12.50 to offer 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

2,468.80 is a short term support level. And 2,472.70 is also a short term level. If the S & P 500 clear this level, I would expect a retest of 2,485.

Buying against support is still the best strategy.

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 closed just above the major 143.75 support level. It closed Friday at 143.84.

143.75 should still be strong support. And 143.36 is minor support.

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

The IWM held just above the minor 141.41 level. This level should offer support. If ti can hold, I expect a run back to 144.

Short term momentum remains bullish.

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 bounced from its short term oversold condition. It closed at 123.89. A close today above 123.83 and the TLT should test 125.

125 should be strong resistance.

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

121.88 should be the objective. 119.53 should be minor support. And 121.09 should be minor resistance.

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 closed again above 66.41. The objective should be to 68.75. For me to be convinced that this downtrend is over, the XLE would have to run to 72 on this drive.

66.21 should be minor support and 66.99 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 should try and test 87.50 again. Watch to see if the FXY can clear this level.

86.52 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 closed just under 150. 149.22 is minor support. If Apple can get back above 150, look for a move back to 153.

WATCH LIST:

Bullish Stocks: AGN, BA, BIDU, ALGN, FB, RTN, EXPE, BABA, MCD, LEA, ALXN, HON, ADP, CAT, DIS, IAC, SINA, CRM, ELS

Bearish Stocks: IBM, PANW, FFIV, BWLD, JACK, DXCM, QCOM, MD, SON, SIMO

Be sure to check earnings release dates.