June 7, 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
BERY Long Sept $47.50 Put at $1.50

APA Long July $40.00 call @ $2.10
APA Long July $40.00 put @ $1.90

SYMC Long at $20.99
SYMC Short June 8th- $21 call at $1.40

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

The S & P 500 broke out yesterday and closed 23.55 points higher. It closed the day at 2,772.35.

The recent contractions we have seen are indicative of a price reversal or a big breakout move like we had yesterday. And the low for the day was 2,748.46, which was right around the minor 2,749 level I mentioned yesterday.

Clearing that level meant the market should test the next upside level, which is 2,753.93.

And now that the market has closed well above it, we would expect support at that level.

And the significance is that if the market can close above it today, the upside objective should be to 2,812.50.

This once again demonstrates how the best strategy is to trade is the longside when the short term charts are trending to the upside. And that has been the case for the major indexes.

Short term, the market is overbought. How do we know that? It is simple. The S & P 500 is trading above its upper band on the 30 minute chart.

At some point, it should pullback. And we do know that when the market does pullback that 2,753.93 should offer support.

Support from yesterday's daily price bar is in the 2,760 to 2,763 area.

And as a reminder, there is one position that expires tomorrow. That is the short $21 call on SYMC.

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 11.64 yesterday. This now brings the VIX back under the major 12.50 level.

The key level at the moment is 10.94. A break under this level should indicate that the VIX should go lower. But with the VIX back around long term support,

With the VIX breaking under 12.50, it should now be resistance. And 12.11 could offer resistance as well.

$SPX:

Major level: 2,812.50
Minor level: 2,792.98
Minor level: 2,753.93 **
Major level: 2,734.40 <
Minor level: 2,714.88
Minor level: 2,675.83
Major level: 2,656.30
Minor level: 2,636.75
Minor level: 2,597.65
Major level: 2,578.10
Minor level: 2,558.58

A close today above 2,753.93 and the new objective becomes 2,812.50.

2,775.90 is a short term resistance level. And the market should open right under this level. A break through this level and expect the market to continue higher.

Short term momentum is bullish. Continue to buy against support.

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 175.86. This was the first close above the major 175 level.

175 should now be support. And minor support is at 175.39 as well.

Watch the next minor level on the upside, which is 176.56.

Like the S & P 500, the 30 minute and 60 minute charts remain bullish. Still stronger than the S & P 500 index. Continue to buy against support.

The QQQ is trading above the upper band on its 30 minute chart, which tells us it is overbought short term.

IWM:

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
Minor level: 161.72
Minor level: 160.16
Major level: 159.38
Minor level: 158.60

The IWM closed at 166.93. With a close today above 166.41, the objective becomes 168.75.

162.50 should offer strong support. And 166.02 should offer minor support.

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 did test the 118.75 level and closed one cent under it.

Next minor level to the downside is 118.36. A break under this level and the TLTs should continue lower.

GLD:

Major level: 128.13
Minor level: 127.35
Minor level: 125.78
Major level: 125.00
Minor level: 124.61
Minor level: 123.83
Major level: 123.44
Minor level: 123.05 **
Minor level: 122.27
Major level: 121.88 <
Minor level: 121.49
Minor level: 120.70
Major level: 120.31

The GLD closed 122.92, closing just under the major 123.44 level again. The midband is now 123.05 and the GLD closed just under it.

Objective should be to 121.88. And resistance should be at 123.44

I am still biased for a move to the downside, but a straddle or strangle at the midband is a low risk strategy to consider at the moment. Perhaps an uneven straddle?

XLE:

Major level: 81.25
Minor level: 80.47
Minor level: 78.91
Major level: 78.13
Minor level: 77.35
Minor level: 75.78
Major level: 75.00 <
Minor level: 74.22
Minor level: 72.66

The XLE closed at 75.90 on Friday. Yesterday's low came to 75.23 or 23 cents above the 75 level.

This now implies that if the XLE can close above 75.78 today, it should retest the 78.13 level. 75.39 is minor support.

FXY:

Major level: 89.06
Minor level: 88.87
Minor level: 88.48
Major level: 88.28
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

The FXY closed at 86.89. The FXY closed just under the midband, which is 86.99.

The objective should be to 86.72. 87.50 should now be resistance. 87.11 should also be minor resistance.

AAPL:

Major level: 193.75 <<
Minor level: 192.97
Minor level: 191.41 **
Major level: 190.63
Minor level: 189.85
Minor level: 188.28
Major level: 187.50
Minor level: 186.72
Minor level: 185.16
Major level: 184.38

Apple closed at 193.98. If Apple clears 193.75, it paves the way for a move up to 200. And the objective should be to 193.75.

Apple is trading right at the upper band on the 30 minute chart, which does suggest it is overbought shortterm.

Also, the 30 minute chart is getting close to crossing into an uptrend.

WATCH LIST:

Bullish Stocks: AMZN, GOOGL, NFLX, FDX, ALGN, ADBE, LGND, CP, ODFL, ACN, CME, VRSN, KLAC, DECK, LULU, GRUB, MSFT, ADI, WIX

Bearish Stocks: CHTR, CB, JNJ, LOGM, CASY, ALL, JACK, WBA, HSIC

Be sure to check earnings release dates.