May 15, 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

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Yesterday, you should have closed out the long call position on KMI, assuming you executed the trade alert.  The trade resulted in a gain of 28%.

Now back to the markets.

The S & P 500 closed out yesterday at 2,730.13.  The market was up slightly on the day.  It was up 2.41 points for the day.

This was the second consecutive day that the market contracted.  So, we know that an expansion is due.

And for the day, the market formed a doji bar.  This is usually charaterized by a narrow range day and the open approximately equal to the open.

Yesterday's close was 2,730.13 and the open was 2,733.37, so the open was within a couple of points of the close.

The average true range now reads 32.83 points.  So, yesterday's range of 16.63 was about one half of the average.  And Friday's range was 15.41, which was also about one half of the average.

And this morning, before the open, the S & P 500 is trading about 9.50 points to the downside.

This projects an open around 2,720.  This would mean that the close of 2,730 should be resistance.

Support from last week's weekly bar should be in the 2,694 to 2,698 area.

Tomorrow at 12:00 EST is our regularly scheduled webinar. If you have any questions or comments, please email at davismdt@gmail.com and I will try to address your issues on the webinar.

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 12.91.  The VIX is now within 41 cents of the 12.50 objective.

"I am biased for a bounce at 12.50.  However, if the VIX breaks under the 12.50 level expect it to continue lower and the markets to head higher."  I wrote this yesterday and it appears that the VIX will bounce hear.

I do believe that a rally in the VIX will fail.  The question is at what level?

I feel that the VIX will not exceed 15.63.  Watch for resistance at that level. And a reversal to the downside would indicate the market should head up.

Minor resistance should still be at 14.06.  

$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 

The market did clear the 2,734.40 objective, but could not close above it.  On the downside, watch the 2,714.88 level.
Also, minor resistance should still be at 2,744.10.

Yesterday's close of 2,730.13 should be resistance.

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 169.75.  The objective should be still be up to 175.  However, like the S & P 500 yesterday, the QQQ formed a  doji bar. So, watch the close today.

168.75 should offer strong support.  And 171.88 could offer some resistance.

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 
Minor level: 152.35

The IWM reversed and closed at 159.23.  159.63 should offer minor resistance.

The next level to the upside is 160.16.  158.38 should offer minor support.  And minor resistance is at 160.94.   158.59 should offer support.

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 118.60, dropping .63 for the day.  118.55 is a minor level to watch.  A break under this level and expect the TLT to continue lower.

118.75 should now be resistance.

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 124.48, closing under 125 level.  A close today under 124.61 today and the GLD should drop to 123.44.

If 125 holds as resistance, the drop could be hard.

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 77.26.  And the XLE came within 52 cents of the 78.13 objective.

75 should offer major support. And 75.78 should offer minor 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 87.33.  It is now back to selling off.  Watch the daily midband, which is 86.94.  A break under this level and the FXY should continue lower.

87.40 should now offer minor resistance. support.  

AAPL:

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 

Apple closed at 188.15.  

Apple is overbought short term. And is now pulling back from this overbought set up.

Apple has moved into an uptrend on the 60 minute chart and is in an uptrend on the 30 minute chart.  A sell off would be an opportunity to go long.

Watch 187.50 for support.

WATCH LIST:

Bullish Stocks: AMZN, GOOGL, BA, GWW, ALGN, BIDU, NVDA, ILMN, ADBE, PAN, BABA, AAPL, BLUE, RHT, CAT, ACN, ADSK, CR, CVX

Bearish Stocks: CHTR, DTE, THO, BUD, CELG, AEP, D, UAL, PZZA, LB, JD

Be sure to check earnings release dates.