November 15, 2018 - MDT Pro Tips A.M.

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

Yesterday was an almost identical repeat of Tuesday's daily price action.

The market gapped higher at the open only to give back those gains to close lower.

The only difference were the odds.  For Tuesday, the odds of violating the low before the high was about 90%.  And for yesterday, the odds of violating the low before the high was about 80%.

And intra day, the price pattern was virtually the same yesterday as Tuesday.

After the market gapped up, it ran up to a high of 2,746.80 only to reverse and head down all day, virtually repeating the pattern from Tuesday.

The low came in at 2,685.75 at 2:00 EST, a key intraday turning point.

For the SPY, the move was 6.16 points.  And with a Wednesday, the leverage using the front week options is not as great as a move like this on a Friday but a put position was profitable, never the less.

The S & P 500 ended up closing for the day at 2,701.58 

I do want to point out that all major markets except for the DOW are trading under their midbands on their respective daily charts.

The DOW is just above its midband which is 25,042.72 and yesterday, the index closed at 25,080.50.  So it is just above it.

However, the daily chart for the DOW has moved into a downtrend, while the S & P 500 and the NASD Composite are clinging to uptrends.  Just barely I may add.

The question now is when will this pullback end?

I don't believe we will see the end of this pullback until we see at least one more selling climax.

And now that we are firmly trading under the midband, there is a very real possibility that the market drops to its lower band which is 2, 516.  This level also happens to coincide with a major support level which is 2,500.

Our resistance levels should help to confirm the downside objectives as the market trades lower.

The immediate objective for the S & P 500 was 2,695.30 and that was hit yesterday.

This is a level that should offer support.  So, a violation of this level would be critical.

The next major level under 2,695.30 is 2,646.50.  This is because if the S & P 500 has two closes under 2,646.50, the market could drop to 2,500.

This move would also be further supported if the S & P 500 crosses into a bear trend on its daily chart.

Of course, I will be monitoring all these factors as the market trades into the future.

Yesterday's close percentage was 26%.  So, the odds of violating the low before the high are about 75%.

Earnings continue this week.  The big report that will be closely followed will be Nvidia.  NVDA reports this afternoon after the close.

Continue to monitor the levels as I mentioned.

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 

The VIX closed at 21.26.  This was the first close above 20.31.  So, a close today above 20.31 would put the objective for the VIX to 25.

The VIX did take out the midband on the 30 minute chart and is now sitting just above it.  That level is 20.74.  So, watch to see if this holds as support.

23.44 is minor resistance.  And 19.53 is support.

SPX: 

Minor level: 2,805.20 
Major level: 2,793.00 
Minor level: 2,780.78 
Minor level: 2,756.33 
Major level: 2,744.10 
Minor level: 2,731.90 
Minor level: 2,707.50 
Major level: 2,695.30 < HIT
Minor level: 2,683.10 **
Minor level: 2,658.70
Major level: 2,646.50

The S & P 500 hit the 2,695.30 objective.  The next downside level is 2,683.10.  And to move higher, the market would need two closes above 2,707.50.

2,725 should be resistance. And minor support is at 2,700 and 2,676.

QQQ:  

Major level: 178.13
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 **
Minor level: 164.06
Major level: 162.50 <

The QQQ closed at 165.20.  Biased for a drop to 162.50.

Yesterday saw the second close under the major 168.75 level.  This now sets up a scenario where the QQQ could drop as low as 150.

With the QQQ trading under the midband which is 168.98, I would expect resistance at that level.  Also, the major 175 level should be resistance.

167.20 should also be resistance.

IWM:

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 **
Minor level: 145.31
Major level: 143.75 

The IWM closed at 149.45.  Two closes under 148.44 and the IWM should drop to 143.75.

Minor support is at 146.88.  And resistance is at 150 and 151.56.

TLT:  

Major level: 115.63
Minor level: 115.24
Minor level: 114.45
Major level: 114.06 Hit!
Minor level: 113.67 
Minor level: 112.89 **
Major level: 112.50
Minor level: 112.11 
Minor level: 111.33
Major level: 110.94

The TLT closed at 114.09.  To move higher, the TLT will need to move above 114.45.

I don't see this bounce moving higher than 115.63.  If it does, the bounce could go as high as 118.  The TLT is bouncing from its oversold condition.

113.48 is short term support. 

GLD:  

Major level: 118.75
Minor level: 117.97
Minor level: 116.41 
Major level: 115.63 
Minor level: 114.85 **
Minor level: 113.28 
Major level: 112.50 <
Minor level: 111.72
Minor level: 110.16
Major level: 109.38 

The GLD closed at 114.64.  Short term oversold, so I expect a bounce to happen.  And it appears to be starting.  If there is any following through today, I would expect a continuation of the bounce.

114.06 is minor support. And 115.23 is minor resistance.

XLE: 

Minor level: 72.66  
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

The XLE closed at 65.43.  Two closes under 64.85 and the XLE should drop to 62.50.

The short term 30 minute chart has crossed into an uptrend.  And the midband is 68.  The XLE will need to clear this level to move higher.

Also, for the XLE to move higher, it will need two closes above 66.41.

64.06 is minor support.

FXY:

Major level: 85.94
Minor level: 85.75
Minor level: 85.36 
Major level: 85.16 
Minor level: 84.97 
Minor level: 84.58 
Major level: 84.38 <
Minor level: 84.18 
Minor level: 83.79 **
Major level: 83.59 <

The FXY closed at 84.18.  The FXY should test 84.38.  And it closed exactly on the 84.18 minor level.

Like the GLD, if the FXY follows through today, it should continue its bounce.

83.79 is minor support.  And resistance is at 84.38.

AAPL:

Minor level: 214.06
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

Apple continued to drop and closed just under the midband on its daily chart.  The midband is 187.54.  If Apple closes under this level today, the pullback could be rather steep.

181.25 is minor support.

At this point, I am looking for a move down to 175.

WATCH LIST:

Bullish Stocks: CMG, COST, CME, ZBRA, CLX, DXCM, DIS, DATA, HSY, GPC, ESRX, UAL, EXR, WBA, LW

Bearish Stocks: NVDA, FB, CXO, FANG, EA, CLB, SLB, SRCL, WDC

Be sure to check earnings release dates.