September 12, 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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The S & P 500 reversed and closed higher yesterday. It closed at 2,887.89, up 10.76 points for the day.

And the range was 25.74 points. This was greater than the average true range, which is now 19.52 points.

The low for the day came in at 2,866.78. The low came in about 7 points above the upper end of the monthly support level of 2,861.

The key now will be to see of the S & P 500 can take out last week's high, which was 2,900.18. Yesterday's high came within 8 points of it.

I mentioned that yesterday, the odds of violating the prior low was about 90%. And that happened right off the open, when the market gapped down. This statistic does not necessarily mean the market will continue lower.

Especially after a bearish gap. And usually buying a bearish gap is the wise thing to do when the market is bullish. And vice versa for bullish gaps.

Yesterday, the S & P 500 closed at 82% of its daily price bar. This puts the odds of the high being violated before the low at about 80%.

At this point, the weekly area of 2,882 to 2,884 should offer support on a pullback.

And the key for today will be if the S & P 500 close above last weeks high of 2,900.18.

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

The support area from yesterdays daily price bar is in the 2,878 to 2,880 area.

Watch to see if the market holds support in this area on a pullback.

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 13.21. The high for the day was 14.92.

This is right on the technical support level, which is 13.22. A break under this level and I would expect a test of 12.50.

14.06 should offer strong resistance. And minor support should be at 11.72.

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, I would expect strong support at 2,878.40. And the key will be to see if the S & P 500 can clear the major 2,890.60 level.

2,884.50 could also offer minor support. On the upside, 2,902.80 could offer some resistance.

Short term intra day 30 and 60 minute charts are still bullish. Technical support is now around 2,878. 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 183.12. This now implies that if the QQQ can close above 182.81 today, it should test 187.50.

181.25 should be support. 182.03 should be minor support.

Short term charts remain bullish.

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 171.03. If the IWM can clear the minor 171.10 level, it should move up to 171.88.

Minor support should be at 170.31. Technical support is at 182.54.

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 118.66. To move lower, the TLT will need two closes under 118.36.

A break under 117.97 and the TLT should head lower.

The TLT is oversold.

Resistance should be 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 113.22. The GLD will still need two closes above 113.28 to move higher.

Yesterday's low was 112.42, 8 cents under the major 112.50 level. If the GLD can consolidate around the 112.50 level, it could bounce.

A break under 112.50 and I would expect a drop to 109.

Minor resistance remains 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 73.46. I am still biased for a test of the 75 level.

73.05 should offer minor support. If the XLE can clear 73.83, I would expect the XLE to continue up to 75.

Short term momentum is shifting to the upside.

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 85.69. A close today under 85.75 and the FXY should test 85.16.

And minor resistance is at 85.94. And minor support is at 85.55.

Short term charts remain bearish.

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 reversed yesterday and closed at 223.85. Apple never got as low at 212.50.

This again shows how shorting when the short term charts are bullish is not a wise move.

221.88 and 220.31 should now offer support.

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.