May 9, 2019 - MDT Pro Tips A.M.

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The S & P 500 seemed to be getting a bid yesterday and was trading to the upside most of the day.

That is until 3:30 EST. In the span of one-half hour, the S & P 500 gave back all its gains for the day.

Seems to mirror the price action from Tuesday, but only in reverse.

At 3:30, the S & P 500 was trading around the high for the day, which was 2,897.96. The market made a high of 2,896.48 at that time. In the span of a half an hour, the S & P 500 dropped to close at 2,879.42.

So in that span, the market dropped almost 20 points.

This put the close to just about the open. In fact, the close was within 50 cents of the open.

The open was 2,879.61 and the close was 2,879.42.

And the day ended up being an inside day. This tells us to expect an expansion, especially after following a long-range day.

The range for Tuesday was about 50 points and yesterday's range was about one half of that, coming in at 24.68 points.

The market will no doubt follow through to the downside this morning, with the S & P 500 trading about 18 points lower before the open.

Assuming this trading holds up to the open, the market should open around 2,861.42 which would be about 11 points below yesterday's low.

The projected open would also be below the lower band on the 30 minute chart which is now 2,863.81.

The question is, will the market bounce from this short term oversold condition?

Usually, a bearish gap open in an uptrend is an opportunity to buy. The market would have to close above 2,863.81 for it to have a bounce.

I do want to point out that the lower band on the 60 minute chart is at 2,771.74 or about 100 points below where the market is trading now.

The key for today will be the 2,858.90 support line. This should be a short term level of support. If it can't hold, a drop to 2,836 would be expected.

The 2,871.08 level is also a key short term level. The market should open below this level. If it can recoup it, that would be bullish. If it can't, it would be another indication that the market should head lower.

Disney reported last night with a beat but is trading relatively flat. The big move off earnings is on Stamps.com which is down almost $41 after reporting. It is down 48%. I don't think I have an earnings move of that magnitude in quite a long time.

BKNG reports Thursday after the close.

Here are the Key Levels for the Markets:

$VIX:

Major level: 21.88 <
Minor level: 21.10
Minor level: 19.53
Major level: 18.75 <
Minor level: 17.97
Minor level: 16.41
Major level: 15.63
Minor level: 14.85
Minor level: 13.28
Major level: 12.50
Minor level: 11.72

The VIX closed at 19.40. It ran to a high of 21.74 before dropping to close lower.

The VIX has now moved up three major levels which does tell us we should expect another rally in the VIX after a pullback.

It has traded above the upper band on the 30 minute chart and yesterday closed just above it. The upper band is 19.30.

Definitely overbought in the short term but I would expect another run at 21.88.

21.88 should also be a resistance level and the VIX takes it out, it should head higher.

17.19 is minor support on the downside.

SPX:

Major level: 2,968.80
Minor level: 2,949.25
Minor level: 2,910.15
Major level: 2,890.60 <
Minor level: 2,871.08 **
Minor level: 2,832.03
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

As I mentioned, there are a few key levels to watch today. The downside level of 2,871.08 is a key level because if the S & P 500 has two closes under this level, it should test 2,812.50.

And the support level should be 2,858.90.

To see a bounce in the market, the VIX will need to close below the upper band on its 30 minute chart.

QQQ:

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
Minor level: 173.44
Minor level: 170.31
Major level: 168.75
Minor level: 167.19

The QQQ closed out yesterday at 185.77. And like the S & P 500, the QQQ had an inside day. It also had its first close under 185.94. A close today under 185.94 and the QQQ should drop to 181.25.

184.38 is a minor support level. Watch to see if this level holds today. There is also technical support at 183.90. So, I would expect strong support around this level.

A break under 182.91 and the QQQ should head lower.

IWM:

Major level: 168.75
Minor level: 167.19
Minor level: 164.06
Major level: 162.50
Minor level: 160.94
Minor level: 157.81 **
Major level: 156.25 <
Minor level: 154.69 **
Minor level: 151.56
Major level: 150.00
Minor level: 148.44

The IWM closed at 156.76. The IWM is holding just above the midband on the daily chart. The midband is now 156.50. Watch for support here and if it breaks below it, look for lower prices.

The midband is very close to the major 156.25 support line.

For the moment, the IWM is holding the 156.25 support line. If it breaks under it, the next minor level is 154.69.

TLT:

Major level: 126.56
Minor level: 126.17
Minor level: 125.39
Major level: 125.00 < HIT
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

After hitting the major 125 level, the TLT closed at 124.41, down 54 cents on the day.

This now suggests that if the TLT closes under 124.61 today, it should test 123.44.

123.83 is minor support.

GLD:

Major level: 126.56
Minor level: 126.17
Minor level: 125.39
Major level: 125.00
Minor level: 124.22
Minor level: 122.66
Major level: 121.88
Minor level: 121.09 **
Major level: 120.31<
Minor level: 119.92
Minor level: 119.14
Major level: 118.75 <

The GLD closed at 120.91. The GLD could not close above 121.09, so I am biased for a drop to 120.31 or lower.

Watch the 121.09 level today.

Short term charts remain bearish and resistance is at 121. The GLD broke back under the 121 resistance area. This area should be a key level today.

120.31 should also be support.

XLE:

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
Minor level: 64.85
Minor level: 63.28 **
Major level: 62.50 <
Minor level: 61.72
Minor level: 60.16
Major level: 59.38

The XLE closed at 63.75. Watch to see if the major 62.50 level can hold as support. If it can't, it should head lower. Still looking for support at 62.50.

Minor support is at 63.28 and if this level can hold, the XLE should continue higher.

Major support is at 62.50. If the XLE breaks under 63.28, I would expect it to test 62.50.

AAPL:

Major level: 212.50
Minor level: 210.94
Minor level: 207.81
Major level: 206.25
Minor level: 204.69 **
Minor level: 201.56
Major level: 200.00
Minor level: 198.44
Minor level: 195.31
Major level: 193.75
Minor level: 192.19

Apple closed at 202.90. Apple also has an inside day.

Looking for a test of 200. And I would expect support at 200.

Short term charts still remain bullish. If the market does hold and bottom out, Apple could be a great long.

WATCH LIST:

Bullish Stocks: ROP, NTES, SHOP, LLL, APD, VMW, UNP, DE, SWK, CB, JNJ, WIX, RCL, KLAC, KMB, KSU, WCN, MCHP, UAL, CSX, WPC

Bearish Stocks: GOOGL, BDX, AMGN, CVX, EA, PSX, ALNY, LW, SQ, XEC, CLB, Z, WERN, APA, MOS, MRO

Be sure to check earnings release dates.