September 10, 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
Total Premium Collected - $1.65

BERY Long Sept $50.00 Call at $2.70

FEYE Long at $16.69
Total Premium Collected - $0.93

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The week closed out with the S & P 500 closing 6.37 points to the downside. For the week, the market closed at 2,871.68.

The range for the day was 19.79 points, which basically equaled the daily average true range.

This tells us that selling has not picked up.

And based on Thursday's close percentage of 43%, we had roughly a 60% chance that the S & P 500 would violate the low before the high. And that is what happened.

After gapping down off the open, the market reversed to fill the gap. So, right off the open, the S & P 500 made a new low.

Price did come back to fill the gap and hit a high of 2,883.91. This was within 50 cents of the midpoint resistance level from Thursday.

For the today, the resistance level is in the 2,870 to 2,874 area.

And for the week, the S & P 500 closed 29.84 points lower. The weekly price closed at 21%. This tells us that there is about an 80% chance of the weekly low being violated before the high.

The weekly resistance level is in the 2,882 to 2,884 area.

Even though we had a selloff, the weekly range was only 36.06 points. And the weekly average true range is now 52.96 points. This was the third consecutive week that the weekly range contracted.

Pre open, the S & P 500 is trading about 10 points to the upside. Technical resistance is around 2,891. Watch to see if the S & P 500 can clear this level or is turned back.

Earnings do continue this week, but the number of companies reporting is slowing down.

Here are the Key Levels for the Markets:

$VIX:

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
Minor level: 7.81
Major level: 6.25

The VIX managed to close higher for the second day, at 14.88. This does now imply that the VIX should test 18.75.

16.41 could offer strong resistance. And it this point, 14.06 should offer support.

SPX:

Major level: 2,939.50
Minor level: 2,927.28
Minor level: 2,902.83
Major level: 2,890.60
Minor level: 2,878.40 **
Minor level: 2,854.00
Major level: 2,841.80 <
Minor level: 2,829.60
Minor level: 2,805.20
Major level: 2,793.00

At this point the S & P 500 should test 2,841.80. 2,866.20 is minor support.

Short term intra day 30 and 60 minute charts are still bullish. Technical support is around 2,869 and price has bounced off it twice. Technical resistance is at 2,891.

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 Hit
Minor level: 179.69 **
Minor level: 176.56
Major level: 175.00

The QQQ closed at 181.11. This was the first close under the major 181.25 level.

To move lower, it will need two closes under 179.69.

A break under 181.25 and the QQQ should head lower. Minor support level is 179.69. Two closes under that level and the QQQ should drop to 175.

Like the S & P 500, short term charts remain bullish, but the QQQ is sitting right on the midband on the 60 minute chart. This level is 181.09. A break under this level would be bearish.

IWM:

Major level: 175.00
Minor level:174.22
Minor level: 172.66
Major level: 171.88
Minor level: 171.10 **
Minor level: 169.53
Major level: 168.75 <
Minor level: 167.97
Minor level: 166.41
Major level: 165.63

The IWM closed at 170.54. The IWM should test 168.75.

Minor support should be at 169.53. A break under this and the IWM should drop to 168.75. On the upside, 171.09 is minor resistance.

170.26 is technical support. A break under this and expect the IWM to keep dropping.

TLT:

Major level: 123.44
Minor level: 123.05
Minor level: 122.27
Major level: 121.88
Minor level: 121.10 <
Minor level: 119.53 **
Major level: 118.75
Minor level: 118.36
Minor level: 117.58
Major level: 117.19

The TLT closed at 119.13. I would expect 118.75 to be tested. Minor support should be at 117.97. A break under this level and the TLT should fall lower.

On the upside, 120.31 is resistance, as well as 119.53.

GLD:

Major level: 117.19
Minor level: 116.80
Minor level: 116.02
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 113.23. The GLD will still need two closes above 113.28 to move higher.

111.72 is minor support now. And 112.50 should also offer support.

Minor resistance is at 114.06.

XLE:

Major level: 78.13
Minor level: 77.35
Minor level: 75.78
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 72.80. The XLE did hit the 71.88 level. Friday's low was 71.78.

71.88 is a key level. Two closes under that level and the XLE could drop to 62.

Minor support should now be at 71.88 and 71.09. And minor resistance is at 73.44.

FXY:

Major level: 86.72 <
Minor level: 86.53
Minor level: 86.14 **
Major level: 85.94
Minor level: 85.75
Minor level: 85.36
Major level: 85.16
Minor level: 84.97

The FXY closed at 86.14. "The FXY held just above the minor 85.55 level. A close today above 86.14 and the FXY should test 86.72." From Friday. The FXY did close exactly on the level.

85.94 should offer support. And resistance is at 86.52.

Technical resistance is at 86.06, and the FXY is right on the level. Watch to see if it holds.

AAPL:

Major level: 237.50
Minor level: 234.38
Minor level: 228.13
Major level: 225.00
Minor level: 221.88 **
Minor level: 215.63
Major level: 212.50
Minor level: 209.38

Apple closed at 221.30. A clsoe today under 221.88 and Apple should test 212.50.

225 should now be resistance. And 218.75 should offer support.

Short term charts still remain firmly bullish. Buy oversold conditions. Be patient and wait for the turn.

WATCH LIST:

Bullish Stocks: JUM, ULTA, COST, AET, HD, BURL, HON, CLX, ADP, VRSK, KSU, DG, ROST, TSCO, KMX

Bearish Stocks: TSLA, FB, BABA, LRCX, CRI, EXP, SWKS, GILD, AABA, MNST, FSLR

Be sure to check earnings release dates.