March 2, 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
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AMC Long at $15.27
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Short March $16 call @ $0.55

UNIT Long at $17.00
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VIPS Long @ $17.19
Short March 9th - $17.50 call @ $1.65
..........................................................................................

Yesterday closed out with another large range sell off.  For the day, the S & P 500 closed 36.16 points to the downside, at 2,677.67.

The range for the day was 71.24 points.  With an average true range of 45.27 points, yesterday's range was almost 160% of the average true range.

This tells us that yesterday's low should be violated before the high.   And with the S & P 500 trading about 18 points to the downside before the open, that will most certainly be true.  That projects an open around 2,660.

I bring this up because the upper end of the support level from last month's monthly price bar is in the 2,625 to 2,650 area.

So, based on the projected open, the market should be around the upper support area.

I do need to mention that at this point, the markets have not seen any selling climaxes during this recent downswing.

With the daily ranges expanding to the downside, I have to wonder if another flash crash is possible.  I don't know it this type of event  can be avoided, but I do need to mention it.  Most certainly, you want to short any rallies if you have the opportunity.

As for our resistance levels, the market is approaching the 2,656.30 level.  This is also right around the upper support level from last month's price bar.

If this level is violated, the next major support level is 2,578.10.

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 22.47.  The high for the day was just over the 25 level, at 25.30.

I still expect resistance at the 25 level.  If the VIX takes out 25, look for a move up to 31. 

$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

Look for a test of 2,656.30 today.  The question is will this level hold?  With a violation of 2,695, I would now expect that level to offer resistance.

Two closes under the minor 2,646.50 level and I would expect the S & P 500 to test 2,500.

QQQ:  

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 <
Minor level: 160.94
Minor level: 157.81 
Major level: 156.25  

The QQQ closed at 164.48.  162.50 should be tested.  A break under 159.38 and the QQQ should continue lower.

167.19 should now be resistance.

IWM:

Minor level: 157.03 
Major level: 156.25 
Minor level: 155.47 
Minor level: 153.91 
Major level: 153.13 
Minor level: 152.35 
Minor level: 150.78
Major level: 150.00 <
Minor level: 149.22
Minor level: 147.66
Major level: 146.88

The IWM closed at 149.95, just 5 cents under the major 150 level.  If the IWM cannot hold 150, look for a move down to 146.88.

Two closes under the minor 146.88 level and the IWM should test 141.

TLT:  

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
Minor level: 116.80 
Minor level: 116.02
Major level: 115.63

The TLT closed exactly on the 119.32.  We were looking for a bounce and are now getting it.

A close today above 119.14 and the TLT should test 120.31.  120.31 should be resistance.  If the TLT can take out 120.31 on this drive, I would expect it to continue higher.

118.75 should offer support.

GLD:  

Major level: 131.25
Minor level: 130.47
Minor level: 128.91
Major level: 128.13 
Minor level: 127.35 
Minor level: 125.78 **
Major level: 125.00 <
Minor level: 124.22 
Minor level: 122.66 

The GLD closed under the 125.00 level, at 124.75.  125.78 is a minor resistance level.  Watch to see if the GLD can clear this level.

The next level on the downside after 125, is 124.22.  A break under 124.22 and the GLD should drop 
to 121.88.

XLE: 

Minor level: 76.95 
Major level: 76.56 
Minor level: 76.17
Minor level: 75.39 
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 <
Minor level: 67.97 **
Minor level: 66.41
Major level: 65.63 

The XLE closed at 66.64.  Watch for a test 65.63.  I would expect some support at the 65.63 level.

67.21 is the midband on the daily chart. Because the XLE is trading under it, it becomes resistance. If the XLE can get above it, then it would shift to support.

Resistance should now be at 68.75.

FXY:

Major level: 91.41
Minor level: 91.22
Minor level: 90.83 **
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

The FXY closed at 90.31.  89.84 should be minor support.  I do need to point out that the FXY broke back above the upper band on its daily chart.  90.01 is the upper band.

Showing unusual strength at the month.  Not time to short. 

AAPL:

Major level: 181.25
Minor level: 180.47
Minor level: 178.91
Major level: 178.13
Minor level: 177.35
Minor level: 175.78 
Major level: 175.00 <
Minor level: 174.22
Minor level: 172.66
Major level: 171.88 

Apple closed at 175, closing exactly on the major level.  Apple still needs two closes above 178.91 to test 181.25.

173.44 is a minor support level.  If Apple moves under 173.44, I would expect a move down to 168.75.

WATCH LIST:

Bullish Stocks: AMZN, BA, LLL, ADBE, CTAS, PANW, FFIV, RHT, JPM, CRM, GPN, ZTS, SFLY, CTSH, PTC, MSFT, 

Bearish Stocks: REGN, MLM, AGN, ZBH, KMB, DGX, HSY, CL, KHC, MMP, PZZA, HCN, TUP

Be sure to check earnings release dates.