May 15, 2017 - 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

DYN Long at $12.55
Premium Collected $0.48

COWN - Long at $14.95

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FEYE hovered just under the $14.50 strike the majority of the day on Friday, before rallying to close 29 above the strike.? This is one of those situations where the low VIX has hurt again, because I would have rolled out another week if we could have collected a bit more premium.

The end result is that you should have sold your stock at $14.50.? The gain on the sale was 6.2%, however you should have collected another 13% by selling call options against the stock position.

The S & P 500 closed last week at 2,390.88.? It was down 8.41 points for the week.? And the VIX closed at 10.28, down .29 for the week. ?

You should recognize this as a divergence.? Usually, the S & P 500 and the VIX will close opposite of each other.? Last week was unusual is that they both closed to the downside.

The support area from last week's weekly price bar should be in the 2,393 to 2,395 area.

When we scope down to a daily chart, you see that Friday formed an inside day for the S & P 500.? And as seems to be the case as of late, the range for the day was only 5.25 points.? And with an average true range of 13 points, the contraction was less than 50% of the ATR.

All this adds up to expect an expansion.

As for direction, I am still biased for a move up to 2,406.? And I would expect strong support at 2,375.

Shorter term, support is at 2,390.60 and with a close 28 cents above that level, I would still expect it to offer support.

I would also expect support at 2,386.

Here are the Key Levels for the Markets:

$VIX:

Minor level: 14.45
Major level: 14.06
Minor level: 13.67
Minor level: 12.89
Major level: 12.50
Minor level: 12.11
Minor level: 11.33
Major level: 10.94 <
Minor level: 10.55 <
Minor level:? 9.77
Major level:? 9.38 Strong support

The VIX closed back under 10.94 on Friday.? A close today under 10.94 implies a move down to 9.38.

Watch the 10.16 level.? It should offer support, but a break under it would imply further movement to the downside.

$SPX:

Major level: 2,406.30 <
Minor level: 2,398.48 **
Minor level: 2,382.82
Major level: 2,375.00
Minor level: 2,367.20
Minor level: 2,351.60
Major level: 2,343.80
Minor level: 2,335.98

Objective is still to 2,406.30. ?

2,390.60 and 2,386.70 should offer support now.

On the upside, 2,402.30 is a minor resistance level.

QQQ: ?

Major level: 140.63
Minor level: 139.85
Minor level: 138.28 **
Major level: 137.50 <
Minor level: 136.72
Minor level: 135.16
Major level: 134.38
Minor level: 133.60

140.63 should be the objective.? However, the QQQ needs to clear 138.67.

138.28 should be minor support.? The QQQ is still bullish.

IWM:

Minor level: 141.41
Major level: 140.63
Minor level: 139.85
Minor level: 138.28 ***
Major level: 137.50 <
Minor level: 136.72
Minor level: 135.16
Major level: 134.38

137.50 continues to act as support for the IWM, with the IWM closing at 137.51 on Friday.

137.11 should be minor support. 138.28 should be tested.

TLT: ?

Major level: 125.00
Minor level: 124.22
Minor level: 122.66
Major level: 121.88
Minor level: 121.09 **
Minor level: 119.53 <
Major level: 118.75
Minor level: 117.96 ?

The TLT has now had two closes above 119.53.? This now implies a move up to 121.88.

The 60 minute chart has moved into a downtrend.? I would expect a rally to fail at some point.

GLD: ?

Minor level: 122.66
Major level: 121.88
Minor level: 120.32
Minor level: 119.53
Major level: 118.75
Minor level: 117.97
Minor level: 116.41 **
Major level: 115.63 <
Minor level: 114.85 **
Minor level: 113.28
Major level: 112.50

The GLD has now had two closes above 116.41, which implies that 118.75 should be tested.

Both the short term 30 minute and 60 minute charts are in downtrends.? Any rally should be short lived.

117.58 should be minor resistance.

XLE:

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 under 67.97.? A close today under that level and the XLE should drop to 65.63.

67.38 is a minor support level.? 67.97 should be minor resistance.

FXY:

Major level: 87.50
Minor level: 87.11
Minor level: 86.33
Major level: 85.94 ?
Minor level: 85.55
Minor level: 84.77 ***
Major level: 84.38 <
Minor level: 83.60
Minor level: 83.20
Major level: 82.81

The FXY closed above 84.77.? A close today above that level and the FXY should test 85.94.

85.16 should be minor resistance.? And 84.86 should be minor support.

AAPL:

Major levels for Apple are 162.50, 156.25, 150, 143.75, and 137.50

The 156.25 objective was hit on Friday.? Next objective is 162.50.

153.13 should offer support.

WATCH LIST:

Bullish Stocks: AMZN, REGN, TSLA, ULTA, AVGO, HUM, BIDU, ANTM, NFLX, CMI, BABA, ADSK, SWKS, V, IRBT

Bearish Stocks: SPG, SJM, CLB, CCI, VRSK, ETR, CL, ESRX, GIS, VFC

Be sure to check earnings release dates.