March 8, 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.

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On yesterday's webinar, I shared the set up I have been discussing recently with the oversold condition on the 10 minute chart for the S & P 500 coupled with an uptrend on the 30 minute chart.

You can listen to the recording of the webinar in the members area and download the handouts.

The market opened gapping to the downside almost 18 points. The market had a small bounce before dropping to the day's low, which was 2,701.74. The low was still about 6 points above the major 2,695 level, I keep suggesting should offer support.

From the day's low, the market rallied the balance of the day to close at 2,726.80. For the day, the S & P 500 closed down only 1.32 points for the day.

As I mentioned yesterday, following the VIX should help time your long entries.

When the VIX reverses to the downside and begins to head lower is when the markets should reverse and move up.

We were also looking for resistance at higher levels on the VIX. The question is at what level.

The VIX gapped up at the open and dropped slightly before rallying to the high for the day. The high came in at 20.00. From that point, the VIX dropped the balance of the day to close at 17.85.

We expected resistance at 20.31 on the VIX and it fell short by 31 cents. But we cannot expect the levels to be hit exactly. That is why I call the levels and certain moving averages areas. You should be looking for the support or resistance area for price to hold or be repelled.

Pre open, the S & P 500 is trading about 9 points to the upside. If this holds up, the market should open around 2,735.

This would be just above the major 2734.40 level. Minor support would be around 2,724.60.

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 17.85. We were looking for resistance at 20.31 and the high was 20.

18.75 should now be resistance.

On the downside, the key level is 17.19. Two closes under 17.19 and the VIX should drop to 12.50.

$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

The S & P 500 ended up rallying back on the day to close at 2,726.80. Watch the major 2,714.88 level today. If the S & P 500 can clear this level, it should offer support.

Minor support should be at 2,700. And 2,695 continues to offers support.

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 168.93. The high yesterday was 169.07. The QQQ is trading above the 168.75 major level.

Minor support for today should be around 167.97.

A break under 167.19 and it should be resistance. And two closes under 167.19 and the QQQ should drop to 162.50.

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 156.74. The IWM took out the 156.25 objective.

154.69 should offer minor support. And on the upside, 159.38 could be a difficult level to get through on the first attempt. If it does, expect the IWM to head higher.

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 118.01. The TLT continues to bounce around oversold territory.
To move lower, the TLT will need two closes under 117.58.

Minor resistance is at 118.75. I don't expect a drop under 115.63, but if the TLT does, fall under this level, it should head lower.

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 at 125.72. The GLD would still need two closes above 125.78 to test 128.13.

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

The GLD is at a major level. It will either break out or break down.

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 67.19. It continues to bounce around the midband on the daily chart, which is now 67.17.

Wait for a violation of the midband. The violation should point us in the direction of the next minor move.

Also, the 65.63 level should offer support.

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 90.41. The FXY continues to bounce above the upper band on the daily chart, which is 90.29.

A close under this level would set up a short. However, I would expect the FXY to bounce around before a change in trend.

90.23 should now be support.

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 175.00, dropping 1.64. Apple did hit the 178.13 objective we were looking for.

On the downside, 173.44 should be a key level. A violation of this level and Apple could drop to 168.

WATCH LIST:

Bullish Stocks: MELI, NFLX, BLUE, PANW, RHT, WDAY, DNB, WDAY, MON, CRM, KLAC, MKC, GRUB, LULU, DIN, AKAM, AKAM, MSCC, AMAT, X

Bearish Stocks: CHTR, ADX, MLM, WHR, AGN, ZBH, EXPE, DLR, ALB, MDT, RBC, CVS, IRBT, KHC

Be sure to check earnings release dates.