May 24, 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

APA July $45 call @ $1.40
APA July $42.50 put @ $1.75

..........................................................................................

Just as it seemed the S & P 500 would have its first close under 2,714.88, the Fed releases their minutes and the market quickly recovered that level to close up for the day 8.85 points. The final print was 2,733.29.

The market essentially traded above and below the 2,714.88 all morning and into the 2:00 announcement. The market got as low as 2,709.54 before the announcement.
And rallied into the close.

The price level was certainly not a mystery as we have known about it for quite a while. I even mentioned on John's webinar yesterday that the key for the market yesterday was the 2,714.88 level.

On the upside, we also have the 2,734.40 objective. And the market rallied to come within 1.07 points of the upside target.

Pre open, the S & P 500 is trading about 7 points to the downside.

Support from yesterday's daily price bar should be in the 2,721 to 2,724 area. And with an implied open about 7 points lower, the market should open just above that area.

And minor support levels are at 2,723.40 and 2,729.50.

If the market can clear the 2,734.40 level, I would expect a move up to the 2,812 area. But, if it can't a drop to 2,656 would be expected.

We will continue to monitor the VIX to help us to determine the next move. And with the VIX back down to long term support, a pop could happen.

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 12.58. This was just 8 cents above our objective of 12.50. And the low for the day was 12.49, one cent under our objective.

Target hit! What's next?

We certainly have to be mindful that the VIX could rally off this level. Time to lighten up on long positions and consider selling calls against your open positions.

At this point, look for a bounce in the VIX. It will need two closes above 14.06 to move up to 18.75.

If the VIX rallies to 13.67 in the drive bullish drive, I would suspect the VIX will continue higher.

And if the VIX breaks under 11.72, it should head lower.

$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 S & P 500 managed to rally back to just under the 2,734.40 level. You have the support levels from above. On the upside, of course is the 2,734.40 level and 2,744.10.

The S & P 500 would have to clear 2,744.10 to continue higher.

The VIX should help to confirm the next move.

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 169.60. 168.36 should now be a minor support level.

171.09 is the level on the upside that should could offer some resistance.

IWM:

Major level: 165.63
Minor level: 164.85
Minor level: 163.28
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

The IWM closed at 161.97. This took out our objective of 162.50. The IWM reversed yesterday.

If the IWM cannot clear 162.50, we could see a pullback. 160.94 is minor support.

I would not expect a pullback to drop further than 156.25.

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 117.94. This puts it above the minor 117.58 level. A close today above 117.58 suggests a test of 118.75.

I would expect major resistance at 118.75.

118.36 is a minor resistance level on the upside.

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 122.54, closing under the minor 123.44 level. 123.44 should be resistance.

121.88 should be the objective. Higher levels should now offer resistance. Look for resistance at 123.44 or 125. Downside objective should be to 118 - 120 area.

If the GLD does rally, I would expect strong resistance at the 125 level.

XLE:

Major level: 81.25 <<<
Minor level: 80.47
Minor level: 78.91
Major level: 78.13 <
Minor level: 77.35
Minor level: 75.78 **
Major level: 75.00
Minor level: 74.22
Minor level: 72.66

The XLE closed at 77.85 yesterday, after bouncing off the upper band on Tuesday. Continue to watch the upper band, which is 79.36.

The XLE is overbought short term. A pullback to the 72 to 75 area is the logical move. I would expect another rally if the XLE continues to pullback.

FXY:

Major level: 87.50 <
Minor level: 87.31
Minor level: 86.92 **
Major level: 86.72
Minor level: 86.53
Minor level: 86.14
Major level: 85.94
Minor level: 85.75
Minor level: 85.36
Major level: 85.16

The FXY closed at 86.96. A close today above 86.92 suggests a retest of the 87.50 level. On a bounce, the FXY should fail at 87.50.

Ultimately, a larger drop to the 84 to 85 area is expected. Sell against resistance.

The midband on the daily is 86.96. Watch how the FXY reacts at this level.

AAPL:

Major level: 190.63
Minor level: 189.85
Minor level: 188.28 **
Major level: 187.50
Minor level: 186.72
Minor level: 185.16
Major level: 184.38

Apple closed at 188.36. 187.50 should be support. And if Apple can close above 188.28 today, it should move up to 190.63.

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

WATCH LIST:

Bullish Stocks: CMG, BA, GWW, ALGN, ILMN, COST, BLUE, AMGN, DE, HON, FANG, VRSN, EOG, VLO, SPLK, CNC, GRUB, SFLY, WAB, WIX

Bearish Stocks: CHTR, EQIX, LOGM, RCL, DTE, CHKP, SINA, ED, BCO, BG, D, PZZA

Be sure to check earnings release dates.