May 16, 2018 - MDT Pro Tips A.M.

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Yesterday saw profit taking come into the markets.  Of course, this is not shock to you because we were anticipating this because of the VIX dropping down to a long term support level.

As you know, that level is 12.50.

And of course, the VIX bounced as I suggested, which tells us the markets should pullback.

Actually, the VIX dropped as low as 12.65, or 15 cents above the major 12.50 level on Friday. Sorry I am off by 15 cents.

But, what I have not mentioned is that midband on the daily chart for the VIX is 13.07.  And for the past few days, the VIX trading right around the midband.

After taking out the upper band, the midband is the objective.  It is remarkable how many times this happens. If you follow the FXY, you will note the same pattern.  And the GLD just had a similar set up.

For the day, the S & P 500 dropped 18.68 points, to close at 2,711.45.

If you factor in the bearish gap yesterday, the S & P 500 closed at 34% of the daily price bar.

This does suggest that yesterday's low should be violated before the high.

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

Today 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 14.55.  A close today above 14.06 implies a move up toe 18.75.

I would expect resistance at 15.63.  And major resistance at that level.

Minor resistance should still be at 14.84.  

$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 

Yesterday, the S & P 500 closed under the 2,714.88 level.  This would imply that is the S & P closed under this level today, it should test the 2,656.30 level.

Or it should reclaim 2,714.88 to remain bullish, which I believe it will.

Minor support should be at 2,702.60.  This is close to the upper end of the weekly price bar support level of 2,698.

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 167.87.  167 97 is a minor support level.  If the QQQ closes under this level, if could test 165.63.

Watch to see if the QQQ can clear 167.97.  If it can, it should be support.

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 closed at 159.26, just one cent above the major level.  

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 117.25, dropping 1.35 for the day.  At this point, 117.58 should offer resistance.

A break under 116.80 and the TLT should continue lower.

GLD:  

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 <
Minor level: 123.05 **
Minor level: 122.27
Major level: 121.88 <
Minor level: 121.49
Minor level: 120.70
Major level: 120.31

The GLD closed 122.48, closing under 125 level.  The GLD dropped 2.01 for the day. Also, the GLD took out the 123.44 level.

121.88 should be the objective.  123.44 is a major level.  A close today under that level and the GLD should drop to 118 to 120.

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 77.28.  The objective is still to 78.13.

The XLE is getting close to the upper band on its daily chart.  That level is 78.31.

75.78 is 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 86.77.  It did break under the midband, which should now be resistance.  That level is 86.95.  Target should be 86.72.

I would not expect a break under 86.33 on this drive, but if it does, expect the FXY to continue lower.
86.91 is minor resistance.

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 186.44.  Apple is just coming off its overbought condition. I do expect another rally.

Support should be at 184.38.  Price should retest the 187.50 level.

Both short term charts, the 30 & 60 minute remain bullish.

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.