May 10, 2019 - MDT Pro Tips A.M.

CURRENT POSITIONS:

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The S & P 500 opened with a bearish gap of 19.58 points. That was the drop from Wednesday's close. The open was 13.44 points under the low from the prior day.

We were looking for a bounce from this oversold condition.

It appeared that it would happen on Wednesday until the market gave back all its gains for the day a half hour.

There were a few conditions we looked at prior to the open yesterday. The first was that the open would be under the lower band on the 30 minute chart. And the second was that a bearish gap open in a bull market can often be an opportunity to buy.

In looking at our resistance levels ... I said yesterday that "the key for today will be the 2,858.90 support line. This should be a short term level of support. If it can't hold, a drop to 2,836 would be expected."

As it turned out, the market dropped right through 2,858.90 and stopped right at a low of 2,836.40.

And that was the bottom for the day.

From 2,836.40, the S & P 500 proceeded to rally to almost the high for the day which was 2,875.97. The close for the day was 2,870.72.

So, off the support level of 2,836, the market rallied about 34 points.

And for the day, the S & P 500 closed at 87% of the daily price bar. The range for the day ended up at almost 40 points which was 140% of the daily average true range.

This now suggests that there is almost a 90% chance of violating yesterday's high before the low.

Support from yesterday should be in the 2,856 to 2,965 area.

At this point, the 2,858.90 level should be support.

And I mentioned the short term level of 2,871.08 yesterday. The S & P 500 came back to almost close above it with a close of 2,870.72.

But it came short by 36 cents. So, it still qualifies as the first close under the minor 2,871.08 level. A close today above 2,871.08 would be bullish. A close under it would suggest a drop to 2,812.50.

Here are the Key Levels for the Markets:

$VIX:

Major level: 21.88 <
Minor level: 21.10
Minor level: 19.53
Major level: 18.75 <
Minor level: 17.97
Minor level: 16.41
Major level: 15.63
Minor level: 14.85
Minor level: 13.28
Major level: 12.50
Minor level: 11.72

The VIX closed at 19.10. It ran to a high of 23.38 before dropping to close lower. It ended up closing 30 cents lower.

And with the S & P 500 closing lower and the VIX as well, we now have a divergence.

So, the top on May 2nd began with a divergence with the VIX and the S & P 500 and the pullback could possibly end with the same situation.

At this point, 21.88 is minor resistance and 18.75 is support. A break under 18.75 and the VIX should head lower.

SPX:

Major level: 2,968.80
Minor level: 2,949.25
Minor level: 2,910.15
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

The bullish key for today is if the S & P 500 can close above 2,871.08. As I mentioned, it would be bearish if it can't.

The minor support level should be 2,858.90. In fact, the S & P 500 could retest the 2,858 level. Watch to see if it holds.

QQQ:

Major level: 193.75
Minor level: 192.19
Minor level: 189.06
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

The QQQ closed out yesterday at 184.77. The QQQ could test 181.25, but I would expect support to hold there.

Minor support is at 182.81 and 184.38. The QQQ held just above the minor 184.38 level. Watch this level today.

IWM:

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 <
Minor level: 154.69 **
Minor level: 151.56
Major level: 150.00
Minor level: 148.44

The IWM closed at 156.19. The IWM closed just under the major 156.25 level.

The key will be if the IWM can reclaim that level. If it can't a drop to 150 is possible.

But, minor support is at 154.69. A break under this level and the IWM could drop to 150.

The midband is very close to the major 156.25 support line.

TLT:

Major level: 126.56
Minor level: 126.17
Minor level: 125.39
Major level: 125.00 < HIT
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

After hitting the major 124.92 level. The TLT is trying to hold the 125 level.

The TLT reclaims the 124.61 level, it still would need two closes under it to drop to 123.44.

124.61 is minor support. And 125.78 on the upside is minor resistance.

GLD:

Major level: 126.56
Minor level: 126.17
Minor level: 125.39
Major level: 125.00
Minor level: 124.22
Minor level: 122.66
Major level: 121.88
Minor level: 121.09 **
Major level: 120.31<
Minor level: 119.92
Minor level: 119.14
Major level: 118.75 <

The GLD closed at 121.20. This now suggests that if the GLD closes above 121.09 today, it should move up to 121.88.

120.70 should be minor support.

Short term charts remain bearish and resistance is at 121. The GLD broke back under the 121 resistance area. This area should be a key level today.

XLE:

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
Minor level: 64.85
Minor level: 63.28 **
Major level: 62.50 <
Minor level: 61.72
Minor level: 60.16
Major level: 59.38

The XLE closed at 63.75. This is the third consecutive day that the XLE closed exactly at 63.75. This does suggest that the XLE is consolidating and finding a support level.

A break under it would be bearish. But, minor support is at 63.28 and major support is at 62.50.

AAPL:

Major level: 212.50
Minor level: 210.94
Minor level: 207.81
Major level: 206.25
Minor level: 204.69 **
Minor level: 201.56
Major level: 200.00
Minor level: 198.44
Minor level: 195.31
Major level: 193.75
Minor level: 192.19

Apple closed at 200.72. Apple dropped to a low of 196.66 before it recovered and closed just above 200.

Minor support happens to be at 196.88. Watch to see if Apple can hold 200 today.

Short term charts still remain bullish. If the market does hold and bottom out, Apple could be a great long.

WATCH LIST:

Bullish Stocks: ROP, NTES, SHOP, LLL, APD, VMW, UNP, DE, SWK, CB, JNJ, WIX, RCL, KLAC, KMB, KSU, WCN, MCHP, UAL, CSX, WPC

Bearish Stocks: GOOGL, BDX, AMGN, CVX, EA, PSX, ALNY, LW, SQ, XEC, CLB, Z, WERN, APA, MOS, MRO

Be sure to check earnings release dates.