June 6, 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

COWN - Long at $14.95

VRX Long at $13.69

APA Long Oct $47.50 Call at $3.45
APA Long Oct $45 Put at $2.75
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The market paused again yesterday after taking out our upside objective. As you know, the S & P 500 hit the target of 2,437.50 we had been looking for.

It is now uncommon for the market to pause or profit taking sets in after a major objective is achieved.

The next major level to the upside is 2,500 and I suspect it will get hit.

The question is when?

But, buying against support as opposed to shorting is still the best strategy.

The question is where should support be on this pullback?

I do want to mention that both the 30 minute and 60 minute charts for the S & P 500 are in strong uptrends. This would imply that the market should rally after finding support.

The most logical levels are the 200 ema and 253 day simple moving averages.

For the 60 minute chart, the 200 ema is 2,398 and the 253 day average is 2,388. These levels on the 30 minute chart are 2,409 and 2,401, respectively.

2,400 should be strong support level.

And as I mentioned yesterday, the support from last week's weekly price bar is in the 2,422 to 2,425 area.

The best way to monitor theses levels is by using a 30 minute or 60 minute chart. You want to see price begin to consolidate around one of these levels. If price drops through an anticipated support level, it tells you that it should drop to the next level.

I also mentioned yesterday that support form the May monthly price bar is in the 2,385 to 2,400 area. This area also coincides with the support levels from the short term charts, so they should have more importance.

We also have our resistance levels to look at for support, which I update daily.

On the bearish side at the moment, is the fact that the VIX is back to long term support. And it closed slightly to the upside yesterday, at 10.01. If it can hold above 9.77, it should move up to 10.94.

You should have closed out the short call on APA yesterday. We now have an uneven strangle on APA. If it begins to break, I will ass more short calls.

Here are the Key Levels for the Markets:

$VIX:

Minor level: 14.45
Major level: 14.06
Minor level: 13.67
Minor level: 12.89
Major level: 12.50 <
Minor level: 12.11
Minor level: 11.33 **
Major level: 10.94
Minor level: 10.55
Minor level: 9.77
Major level: 9.38

9.57 is a minor support level for the VIX. And if the VIX does close above 9.77 it should bounce to 10.94.

12.50 should still be major 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

The downside confirming line to 2,375 is 2,421.88. This should offer some support for the market.

2,406.30 should also be a support level.

QQQ:

Major level: 146.87
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
Minor level: 136.72

The QQQ came within 7 cents of the 143.75 objective. To move lower, the QQQ would need two closes under 142.97.

142.97 should be minor support. 144.53 should be minor resistance.

IWM:

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
Minor level: 136.72
Minor level: 135.16

The IWM hit a high of 141.11, before selling off to close at 138.98. A close today under 139.85 and the IWM should drop to 137.50.

138.28 should now be minor support.

The IWM just moved into an uptrend on the 30 minute chart and is very close to an uptrend on its 60 minute chart.

TLT:

Major level: 128.13
Minor level: 127.35
Minor level: 125.78 **
Major level: 125.00 <
Minor level: 124.22 **
Minor level: 122.66
Major level: 121.88
Minor level: 121.09
Minor level: 119.53
Major level: 118.75
Minor level: 117.96

Yesterday's high was just above the major 125 resistance level. Minor support is at 123.83. Watch the 125 level.

The TLT would need two closes under 124.22 to move to 121.88.

GLD:

Minor level: 122.66
Major level: 121.88 <
Minor level: 120.32
Minor level: 119.53
Major level: 118.75
Minor level: 117.97
Minor level: 116.41
Major level: 115.63
Minor level: 114.85
Minor level: 113.28
Major level: 112.50

The GLD hit the 121.88 objective with a high of 121.94. The GLD is getting overbought. Watch this level. If the GLD cannot get through it, it could drop sharply.

121.29 should now be minor support. 122.27 should be minor resistance.

XLE:

Major level: 71.88
Minor level: 71.10
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

To move down to 62.50, the XLE will need two closes under 64.85.

64.45 is minor support. I would expect 66.41 to offer resistance.

FXY:

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 continues to hover just under the major 87.50 resistance level.

To move higher, it will need to clear this level. Shorting here with a stop above 87.50 sets up a low risk scenario. 87.30 should be a minor resistance level.

Watch to see if the FXY can clear 87.50.

AAPL:

Major levels for Apple are 162.50, 156.25, 150, 143.75, and 137.50

Apple dropped closing at 153.93. 153.13 should be minor support. 155.47 could be minor resistance.

WATCH LIST:

Bullish Stocks: PCLN, AMZN, GOOGL, REGN, TSLA, AVGO, ULTA, DPZ, MMM, GD, COST, NFLX, BDX, FB, ALGN, EXPE, CB, NVDA

Bearish Stocks: GWW, CXO, SLB, DXCM, DRQ, PDCE, DKS, GCO, CLR, CNQ, CNQ, NBL, KORS

Be sure to check earnings release dates.