May 10, 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

TEVA Long $18.06
Premium collected - $1.46
Short May 11th - $19 Call @ $.36

KMI Long September $16 call @ $1.00

ADTN Long August $15 Call @ $.75
ADTN Short August $17 Call @ $.35

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You should have one short call position that expires tomorrow.  That is the short $19 call on TEVA.  You will receive a separate email if an adjustment is made.

The market broke out yesterday and managed to close 25.87 points higher.  It closed for the day at 2,697.79.

With two consecutive doji bars and two range contractions, we expected a range expansion, which happened yesterday.  The range for the day was  27.13.  Though the range was larger than the prior two days, it was still less the average true range.

The low for the day was  2,674.14.  With a bullish gap open yesterday, I suggested that if the market pulled back, you would want to watch the high from Tuesday as a support level.  Tuesday's high was  2,676.34.

So, the low for yesterday was just 2.20 point under the high for Tuesday.

And the S & P 500 closed above the next minor level, which is 2,675.83.  

Major support should be at the 2,656.30 level.  And if the market closes above 2,695.35 today, I expect a move up to 2,812.

I do want to mention that the low for the month of May so far is 2,594.62.  And the upper band on the monthly chart is 2,596.65.  So, the S & P 500 briefly dropped under the upper band and has now recouped that level.

This does imply a continuation of the bull move.  A close under the upper band on the monthly chart would suggest that the market is changing.

Support from yesterday's daily price bar is at 2,688.

Pre open, the S & P 500 is trading about 3 points to the upside.  

The short term 30 minute chart for the S & P 500 is close to crossing into an uptrend.  If it has the bullish cross over, it will then be in alignment with the 60 minute chart and further movement to the upside would be expected.
Earnings continue this week.  Thursday, we will hear from Nvidia.

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 13.42.  It closed just 4 cents above the low for the day. The objective remains down to 12.50.  And the VIX is now within 92 cents of the objective.

Will the VIX break under 12.50 again?  I don't know,  but I would expect support at the level on the first test. 

Minor resistance should still be at 15.63.  

$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 2,675.83 and the objective should be to 2,734.40.

Minor support is now at 2,685.50.  And watch the 2,697.80 level.

QQQ:  

Major level: 175.00 <
Minor level: 171.88
Minor level: 165.63 **
Major level: 162.50 
Minor level: 159.38 
Minor level: 153.13 
Major level: 150.00  
Minor level: 146.88
Minor level: 140.63
Major level: 137.50

The QQQ closed at 167.88.  The objective should be still be up to 175.

Watch the 168.75 level.  If the QQQ can take out 168.75, I would expect it to head higher.

IWM:

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 
Minor level: 152.35
Minor level: 150.78 
Major level: 150.00 
Minor level: 149.22 

The IWM closed at 158.68.  The objective should be up to 159.38.  And yesterday's high came within 28 cents of it.

Look for support at 157.81.  160.94 could offer minor resistance.

TLT:  

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

The TLT closed at 117.98.  A close today under 118.36 and the TLT should drop to 117.19.

Minor support is at 117.58.  If the TLT drops under 117.58, it should continue 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: 124.61 **
Minor level: 123.83
Major level: 123.44 <

The GLD closed at 124.33, down 26 cents on the day.  The 125 level continues to offer resistance, with yesterday's high at 124.87.

If the GLD drops under 124.22, look for a drop to 121.

But, if the GLD can clear 125, it should head higher.

XLE: 

Major level: 78.13 <
Minor level: 77.35
Minor level: 75.78 **
Major level: 75.00  
Minor level: 74.22 
Minor level: 72.66 
Major level: 71.88 

The XLE closed at 76.05.  A close today above 75.78 and the objective should be to 78.13.

75 should offer major support. 

FXY:

Minor level: 89.26
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

The FXY closed at 87.29.  The FXY is approaching the mid band on the daily chart.

The midband is 86.90.  And 87.50 should be strong resistance.

A drop under 85.94 and the FXY could test the 81 level.

AAPL:

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

Apple closed at 187.36.  The high for the day came to 187.40, just 10 cents under the objective we were looking for. 

At this point, 181.25 should offer strong support on a pullback.  A pullback would be an opportunity to go long.

WATCH LIST:

Bullish Stocks: AMZN, BIDU, PANW, WYNN, MA, RHT, RACE, VMW, KEX, DXCM, LVS, OXY, HFC, DNKN

Bearish Stocks: TSLA, REGN, NTES, AVGO, CMI, ATHN, LOGM, WDC, BG, LUV, MDP, BERY, CLVS, WAGE

Be sure to check earnings release dates.