September 11, 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.

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Before I begin, I just want to say that my thoughts and prayers go out to all those affected by the horrific events that occurred 17 years ago today, in New York City.

As someone who lives within 10 miles of Ground Zero, I still get extremely emotional on this day. Let's pray this never happens again ... anywhere.

Back to the markets.

Yesterday the S & P 500 closed slightly higher. For the day, the market closed 5.45 points higher, at 2,877.13.

The market actually made a higher high and a higher low. The odds favored the exact opposite. But, again, this is not a 100% fast stead rule, it is a guideline.

But for the day, the range was only 10.99 points. Compare with the average daily true range of 19.05, yesterday was the second consecutive contraction.

This shows you, that even though yesterday was a bullish day, the thrust was not that strong.

Yesterday's high came in at 2,886.93. The upper end of the weekly resistance level from last week was 2,884.32.

Now the question is if this could be the high for the week.

We know that in bearish weeks, the high for the week should be made at the beginning of the week.

On the downside, the key levels to watch will be the support levels from the August monthly price bar.

Those key levels are 2,856 to 2,861.

The S & P 500 is still about 20 points above the lower end of the monthly support level.

On the upside, we have the resistance level from last week's weekly bar, which is in the 2,882 to 2,884 area.

Pre open, the S & P 500 is trading about seven points lower.

Resistance from yesterday's daily price bar is in the 2,879 to 2,881 area. Also, watch the close of 2,877.13.

Finally, yesterday's lose percentage was only 11%. The odds are about 90% that yesterday's low will be violated before the high.

And based on the pre market trading, the low should be violated at the open.

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 dropped yesterday and closed at 14.18. I am still biased for a test of 18.75. But the 15.63 level could offer resistance.

Yesterday's price bar was bearish. Based on that, resistance could come in at 14.56.

Minor support is at 14.06. Minor resistance is at 15.23.

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.

On the upside, resistance should be at 2,890.60.

Short term intra day 30 and 60 minute charts are still bullish. Technical support is now around 2,871. Watch to see if price breaks under this level.

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 181.72. The QQQ managed to close just above the major 181.25 level.

To move lower, it will need two closes under 179.69. To move higher, it will need two closes above 182.81.

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.

But, I don't see the QQQ breaking under 179.69. If it does, it should head lower.

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 170.75. 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.

170.44 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 119.57. The TLT only got as low as 119.17. This was about 50 cents above the level we were looking for.

On the upside, 120.31 is resistance, as well as 119.53. Minor support is at 119.14.

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 113.15. 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 72.77. At this point, the XLE has had two closes above the minor 72.66 level. A test of 75 should be expected.

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

Minor support should now be at 72.66 and 72.27. 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 86.01. At this point, 85.94 should offer support.

And minor resistance is at 86.04.

Technical resistance is at 86.10, and the FXY is right below this level. Watch to see if it can clear this level. If it can't look for the FXY to head down.

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 218.33. I am looking for a test 212.50.

Apple closed under the upper band on its daily chart. That level is 222.44, which should now be resistance.

215.63 should offer support. A break under this level and expect 212.50 to be hit. Minor resistance is at 220.31.

Short term charts are still firmly bullish. Technical support is at 210.

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.