November 6, 2017 - 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
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ASNA Long at $14.20
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DUST Long $4.50
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SNAP Long at $15.20
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Short Nov 10th - $15.50 call @ ($0.96)

AMC Long at $15.27
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Short Nov $15 call @ (0.55)

THC Long at $14.63
Premium Collected - $1.65
Short Nov 10th - $14.50 call @ ($0.85)

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The market move higher still on Friday, closing at 2,587.84, up 7.99 points on the day.

For the week, the S & P 500 moved up only 6.77 points. And the range for the week was only 22.25 points. Compared to the weekly average true range of 32.65, this is a contraction. The weekly range was 68% of the weekly average true range.

The weekly price bar formed another doji, which can mean indecision.

Having said that, I don't believe this market is ready to sell off. I say this for a few reasons.

The first is the fact that the market has continually hit its upside objectives.

It doesn't seem that long ago that the S & P 500 was struggling to clear the 2,437.50 level. It took about three months for the S & P 500 to clear that level.

And once it did, it did not take long for the market to clear the next level of 2,500.

And now the market has cleared the next level, which is 2,578.10. And not only that, but it is very close to closing above the next upside confirming line, which is 2,597.65.

This sets up a scenario where 2,578.10 should be strong support on a pullback. And if that level is violated, I would expect support at 2,558.58.

But, as I said on Friday, I feel that this market could go as high as 2,812 before we see a meaningful sell off.

The call I made that probably shocked you was that VIX would break under the long term 9.38 support level. And it finally happened.

Friday, the VIX closed under the 9.38 support level for the first time, when it closed at 9.14.

This is historic.

But this bull market has been historic.

And now I do believe the VIX goes lower.

Earnings continue this week. This afternoon, we will hear from SWKS. And Thursday we will hear from NVDA.

Continue to follow the resistance levels.

Here are the Key Levels for the Markets:

$VIX:

Major level: 12.50
Minor level: 12.11
Minor level: 11.33
Major level: 10.94
Minor level: 10.55
Minor level: 10.16 **
Major level: 9.38 <
Minor level: 8.99
Minor level: 8.20
Major level: 7.81 <

At this point, major resistance is at 9.38 and 10.94. If tje VIX closes two days under 8.99, it should drop to 7.81.

Minor resistance is at 9.57.

$SPX:

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
Minor level: 2,519.53
Major level: 2,500.00
Minor level: 2,484.3

2,580.60 is minor support and 2,595.80 is minor resistance.

The minor 2,583.60 level could also offer support.

Short term momentum still remains bullish.

QQQ:

Major level: 156.25
Minor level: 155.47
Minor level: 153.91 **
Major level: 153.13 < Hit
Minor level: 152.35
Minor level: 150.78
Major level: 150.00
Minor level: 148.44
Minor level: 145.31
Major level: 143.75

The QQQ closed at 153.27, exceeding our objective of 153.13.

The next upside level is 156.25. To confirm a move up there, it will need two closes above 153.91.

Minor support is at 152.73.

IWM:

Minor level: 150.78 **
Major level: 150.00 <
Minor level: 149.22 **
Minor level: 147.66
Major level: 146.88
Minor level: 145.32
Minor level: 144.53
Major level: 143.75
Minor level: 142.97

The IWM closed at 148.61. 148.05 and 148.44 should now be minor support. And minor resistance is at 150.78.

If the IWM does break under 148.05, a test of 146.88 would be possible.

TLT:

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

The TLT jumped, closing at 125.64. The TLT will need two closes above 125.78 to move up to 128.

I still expect resistance at 125.78. Watch to see if this level is violated.

GLD:

Minor level: 125.78
Major level: 125.00
Minor level: 124.22
Minor level: 122.66
Major level: 121.88 <
Minor level: 121.10 ***
Minor level: 119.53
Major level: 118.75

The GLD closed at 120.62. At this point, 121.88 should be resistance.

Minor resistance is at 121.09. And minor support is at 119.92.

XLE:

Minor level: 69.14
Major level: 68.75 <
Minor level: 68.36
Minor level: 67.58
Major level: 67.19
Minor level: 66.80
Minor level: 66.02
Major level: 65.63
Minor level: 64.85

The XLE closed at 68.68. The XLE is still above the mid band, which is 67.76. This level should now be support.

But, the XLE has closed above 68.75 at this point. Two closes above 68.75 and the XLE should head higher.

A close today above 69.36 and the XLE shouls move up to 70.31.

68.36 is minor support. And 69.14 is minor resistance.

FXY:

Major level: 89.06
Minor level: 88.67
Minor level: 87.89
Major level: 87.50
Minor level: 87.11
Minor level: 86.33
Major level: 85.94 <
Minor level: 85.55 ***
Minor level: 84.77
Major level: 84.38 <

The FXY closed at 84.14. The FXY broke under the 84.38 level, which indicates it should head lower.

The FXY is oversold, but it should bounce for a while before determining the next minor move.

AAPL:

Major levels for Apple are 175, 171.88, 165.63, 162.50, 159.38, and 156.25.

Apple almost hit the 175 level after reporting. 171.88 should be support. And 170.31 should also offer support.

WATCH LIST:

Bullish Stocks: AMZN, GOOGL, AVGO, ALGN, BDX, STZ, NVDA, FLT, AAPL, OLED, MA, CME, DE, ALNY, SWKS, WDAY, MSFT

Bearish Stocks: TSRO, EXP, GPC, AAP, ABC, SRCL, ALK, SLB, PZZA, ALKS

Be sure to check earnings release dates.