November 6, 2018 - MDT Pro Tips A.M.

CURRENT POSITIONS:

GOGO Long at $19.93
Total Premium Collected $1.95
 
ASNA Long at $14.20
Total Premium Collected $.75

DUST Long $4.50
Total Premium Collected $.70

SNAP Long at $14.54
Total Premium Collected - $1.65

OI Long Feb $19 call @ $1.70
OI Short Feb $22 call @ $.55

KMI Long (1) Nov 23rd-$17.50 call @ $.20
KMI Long (2) Nov 23rd-$17.00 put @ $.40

CELG Long Jan $75 call @ $3.60
CELG Short Jan $80 call @ $1.90

MDR Long @ $9.31
MDR Short Nov $10 Call @ $0.25

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

If you followed yesterday's alert, you would have added a long stock position and a short call on MDR.  These calls expire next Friday.

It seems the markets are all pausing, waiting for election results today.

For the day, the S & P 500 closed 15.25 points higher, at 2,738.31.  The high for the day was 2,744.27.  And the low was 2,717.94.

So, for the day, the S & P 500 formed an inside day.

This will often lead to an expansion because an inside is typically a contraction.

And yesterday, that was true as well.  The range for the day was 26.33 points and the daily average true range is 47.60.  So the range was 55% of the average.

I do think there are a few keys for the market at this time.  The market is at various key inflection points.

The first one, of course, is the midband on the daily chart.  The midband now reads 2,743.59.  And yesterday's high was within one point of it.

And the market closed just under it.

The other key inflection point at the moment is the major resistance level of 2,744.10.  Yesterday's high was within 17 cents of it.

And because the market closed below it, it should be resistance.

So, the S & P 500 has two key levels just above the market.  And both are resistance at the moment.

The market would have to break above these levels to consider a move higher.

Another fact at the moment is that the QQQ is just above the midband on its daily chart.  That level is 168.50 and the QQQ closed at 168.96 yesterday, or 46 cents above it.

The DOW is the only market trading above its midband at this time.  The midband for the DOW is 24,982.57 and it closed at 25,461.70 yesterday.

So, what does this all tell us?

I think if the market sells off, it could be a large down leg.  I would expect a retest of the 2,646.50 level if that happened.

A break of yesterday's low would help to confirm a sell off.

The other key levels from yesterday's daily bar is in the 2,731 to 2,732 area.

Short term momentum is still bearish.  
 
Earnings continue this week.

Continue to monitor the levels 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 19.64.  It closed to the upside 40 cents.  Like the S & P 500, the VIX had an inside day.

The key short term level at the moment is 20.31.  If the VIX can get above this level, I would expect it to continue higher.

18.75 should be support.  And 17.34 is a technical support level.

SPX: 

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 
Minor level: 2,683.10
Minor level: 2,658.70 
Major level: 2,646.50 
Minor level: 2,634.30
Minor level: 2,609.90
Major level: 2,597.70

The key at the moment is whether the S & P 500 can clear the 2,744.10 level.  So, watch the 2,731.90 level on the downside. The market will have to break under that level to head lower.

A close under 2,731.90 and the S & P 500 should test 2,695.30.

Technical resistance is at 2,773.

Pre open, the S & P 500 is trading slightly to the downside.

QQQ:  

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 
Minor level: 160.94
Minor level: 157.81
Major level: 156.25

The QQQ closed at 168.96.  The QQQ is still holding just above the 168.75 level.

Unlike the S & P 500, the QQQ is trading just above the midband on the daily chart.  That level is 168.50.  If it cannot hold this level, expect the QQQ to move lower.

On the downside, two closes under 167.19 and the QQQ should drop to 162.50. To move higher, it will need two closes above 170.31.

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 153.88.  The IWM is trading under the midband on the daily chart.  That level is 158.02 and should be resistance on a rally.

153.13 should offer minor support.  If the IWM breaks under 153.13, look for a drop to 150.

TLT:  

Major level: 115.63
Minor level: 115.24
Minor level: 114.45
Major level: 114.06
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 112.44.  The TLT will still need two closes under 112.11 to drop to 110.94.

The TLT is oversold and almost at the lower band on the daily chart.  The lower band is 111.22.

111.72 is minor support.  A drop under this level and the TLT should continue lower.  And 112.50 should be resistance.  A break above and expect the TLT to move higher.

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 116.37.  At this point, 116.41 should be minor resistance. And the GLD will have to clear 116.41 to move higher.

If it can't, I would expect a drop to 115.63.

115.63 is minor support.  And 117.19 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 68.69.  The XLE closed within 6 cents of the major 68.85 level.  The high took it out.

Watch to see if the XLE can clear and close above 68.75.  If it can't, I would expect a pullback.

The midpoint of the monthly bar is 71.36.  Watch this level on a rally. 

A break under 68.22 and the XLE should continue lower.

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 84.45.  Watch to see if the FXY can hold the 84.38 level.  If it can't, I would expect it to drop. It is still clinging to it.

84.77 should now be minor resistance.  83.98 should be minor support.

AAPL:

Minor level: 220.31 
Major level: 218.75 
Minor level: 217.19 
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

Apple continued lower and hit the 200 level.  It is approaching the 200 ema which is 196.13.  If this can't hold, I would expect a drop to 187.

200 is a strong support level. So, watch to see what Apple does here.  A break under it and I expect lower lows.
  
WATCH LIST:

Bullish Stocks: CME, DECK, ESL, DG, HSY, TSCO, XLNX, WBA, OMC, TRIP, TWTR, CNK, KFY

Bearish Stocks: LLL, IBM, EA, ALL, CTSH, BG, CERN, BDC, SLB, GIS, ALKS, MTDR, WDR, CLVS, INN

Be sure to check earnings release dates.