May 9, 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

TEVA Long $18.06
Premium collected - $1.46
Short May 11th - $19 Call @ $.36

KMI Long September $16 call @ $1.00

ADTN Long August $15 Call @ $.75
ADTN Short August $17 Call @ $.35

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You should have sold this week's $19 call against the TEVA position.  These are the calls that expire this Friday.

The S & P 500 experienced quite the volatility yesterday as political news out of Washington seemed to affect the intra day trading.

The market opened at 2,670.26 and rallied up to 2,676.34 before dropping to a low of  2,655.20.

From that point, it rallied up to close for the day at 2,671.92.

For the day, the S & P 500 formed another doji bar, with the close slightly above the open.  It closed down .71 points for the day.

In other words, with all this volatility, the market essentially ended the day where it began.

Having said this, price levels I mentioned yesterday had an impact on the intraday activity.

I mentioned that the midband on the 60 minute chart should offer support.  Yesterday, that level was 2,659.76 and the low for the day came in a few points under that level.  By the end of the day, the S & P 500 recouped the midpoint, which should still offer support.  This level today is now 2,657.30.

In addition, I mentioned that strong support should exist at 2,656.30.  And the low for the day was 1.10 points under the support level.
 
I also said yesterday that "The key areas from yesterday's daily price are the close, which was 2,672.63 and 2,671."

And the market opened under that level and sold off, but came back to close at  2,671.92, which is right between the two support levels.

Today, you want to watch the close from yesterday and the high, which was  2,676.34.

Pre open, the S & P 500 is trading about 12 points to the upside.  This projects an open around 2,683 or about 8 points above the next minor level, which is 2,675.83.

This would suggest that if the market pulled back, it should offer support.

I do want to mention that the range for the day was 21.14 points.  And the average true range is now 36.58 points. This means the market has now had two consecutive contractions, which tells us that an expansion should be coming.

And finally, I mentioned that the 60 minute chart has crossed into an uptrend.  The 30 minute chart is in a downtrend.

If the 30 minute can cross into an uptrend, it would tell us to expect higher highs in the market.

Earnings continue this week.  Thursday, we will hear from Nvidia.

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 14.71.  The objective remains down to 12.50.

The high for the day was 15.56, just 7 cents under the minor 15.63 resistance level.  

Short term charts remain bearish so expect the VIX to reverse lower if the the VIX does rally.

Minor resistance should still be at 15.63.  A break under 14.06 and I would expect the VIX to continue 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 should open above the minor 2,675.83 level, so I would expect support there on a pullback.  Also, two closes above 2,675.83 and the objective should be to 2,734.40.

Minor resistance at 2,685.50, so watch this level today.  It is possible that it could offer resistance.

Minor support should be at 2,673.30.

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 166.07.  The objective should be up to 175.

And Minor support is at 165.62.  Watch 167.19 on the upside.

IWM:

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
Minor level: 150.78 
Major level: 150.00 
Minor level: 149.22 

The IWM closed at 157.83.  The objective should be up to 159.38.

Look for support at 157.03.  158.59 could offer minor resistance.

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 118.69, just under the 118.75 support level. A minor support level is 118.55. If this cannot hold, look for the TLT to drop.

The TLT will have to reclaim the 119.14 level to head higher. 

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 at 124.59, up two cents on the day.  The 125 level continues to offer resistance.

If the GLD drops under 124.22, look for a drop to 121.

But, if the GLD can clear 125, it should head higher.

XLE: 

Minor level: 76.95 
Major level: 76.56 
Minor level: 76.17
Minor level: 75.39 **
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

The XLE closed at 74.53.  At this point, I would expect minor support at 73.83.

Look for a retest of the 75 level.  If the XLE can close above 75, I do expect it to continue higher.

73.83 should offer 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 87.79.  The objective should be to 88.28.

87.70 should offer short term support.  And the FXY is holding just above it.  A break under 87.70 and the FXY should head lower.

AAPL:

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 

Apple closed at 186.05.  Looking for a retest of the 187.50.

184.38 should offer minor support.  And minor support is at 185.94.

WATCH LIST:

Bullish Stocks: AMZN, BIDU, PANW, WYNN, MA, RHT, RACE, VMW, KEX, DXCM, LVS, OXY, HFC, DNKN

Bearish Stocks: TSLA, REGN, NTES, AVGO, CMI, ATHN, LOGM, WDC, BG, LUV, MDP, BERY, CLVS, WAGE

Be sure to check earnings release dates.