March 21, 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

AMC Long at $15.27
Premium Collected - $2.80

UNIT Long at $17.00
Premium Collected - $0.35

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

After the large range on Monday, the market contracted yesterday and formed an inside day. Perhaps market participants are waiting for the Fed announcement today on interest rates. We will hear from the Fed at 2:00 EST.

The market opened slightly to the upside yesterday and hit the high for the day, which was 2,724.22.

From the high, the market dropped to a low of 2,710.05, before rallying to close at 2,716.94.

The close was just above the minor 2,714.88 level. This was significant in the fact that a close under the minor 2,714.88 level would have put the downside objective to 2,656.30.

At this point, you want to see if 2,714.88 can hold as support. There is also resistance from yesterday's daily bar in the 2,716 area.

The range for the day was only 14.17 points. Compared to the average true range of 36.48 points, the range for the day was only 39% of the average.

This tells us to expect another expansion at some point. Perhaps today.

And perhaps after the Fed announcement.

2,718.50 is a minor resistance level. If the S & P 500 reverses off of this level, I would expect a test of 2,700.20.

Pre open, the S & P 500 is trading about 4 points to the downside. This would put the open around 2,713. Watch the levels I mentioned above for resistance.

Also, at this point, resistance on the VIX should be at 18.75. If the VIX does clear 18.75, I would expect it to move higher.

As the VIX heads down, the markets should head up.

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 ended up closing at 18.20. The VIX also had an inside day yesterday. A minor level is at 18.36. Watch how the VIX reacts at this level.

Minor support is now at 17.19. And minor resistance is at 21.88. To move down to 12.50, the VIX will need two closes under 17.19.

$SPX:

Major level: 2,890.60
Minor level: 2,871.08
Minor level: 2,832.03
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 support is at 2,695.30. We also have a minor support level at 2,719.70.

Watch how the S & P opens relative to 2,719.70. An open under it and I would expect it to be resistance.

Yesterday, I said that 2,724.60 should now be resistance. the high for the day was 2,724.22.

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 167.65. 167.97 is a minor level and if the QQQ closes under 167.97 today, it should drop to 165.63.

Both short term 30 & 60 minute charts are still in uptrends. So, the QQQ should find support after this pullback. And 166.21 is the midband on the 60 minute chart and the QQQ stalled right at it on Monday.

IWM:

Major level: 162.50
Minor level: 161.72
Minor level: 160.16
Major level: 159.38
Minor level: 158.60
Minor level: 157.03 **
Major level: 156.25 <
Minor level: 155.47
Minor level: 153.91
Major level: 153.13

The IWM closed at 156.24, just 1 cent under the major 156.25 level.

A drop to the 153 level would be a normal pullback. But, to drop to that level, I would expect two closes under 155.47.

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 at 118.95, just 20 cents above the 118.75 level. This level should offer support.

If it is violated, watch the 117.97 level. If the 117.97 is violated, a drop to 115.63 should happen.

118.36 is a minor support level.

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
Major level: 121.87

The GLD closed at 124.31. Watch to see if it can close under 124.22. If it can, a drop to 122 would be expected.

123.44 is a support level. If the GLD does close under this level for two days, it could drop to 119.

Short term charts remain bearish, so I am biased to the downside.

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 66.83. The XLE continues to bounce around the midband on the daily chart. The midband is now 66.69.

The XLE continues to trade between the 68.75 and 65.63 levels. The longer the XLE continues to trade between these levels, the bigger the move once it breaks out.

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 89.97. I would expect a test of 89.06.

Minor support is at 89.84. Watch this level, as support could come in. With the sell off against the upper band, I do expect further movement to the downside.

AAPL:

Major level: 187.50
Minor level: 185.94
Minor level: 182.81
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

Apple closed at 175.24. Apple is trying to hold the 175 level. If this level does not hold, I would expect a drop to 168.75.

Continue to buy against support.

WATCH LIST:

Bullish Stocks: NTES, GWW, AVGO, NVDA, ADBE, ALNY, AMT, ZBRA, VRSNm GRUB, ALL, CTSH, AABA, WEC, LUV, DAL, SQ, CAR, WGO, TRIP, TWTR

Bearish Stocks: TSLA, ZBH, DISm CNI, BG, WBA, WBA, AIG, HOG, DISH, BITA

Be sure to check earnings release dates.