September 20, 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 - $1.26
Short Sept 28th - $17 Call @ $0.33

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

You should have sold the $17 call on FEYE, that expires next Friday. This of course, applies only if you own the stock.

Yesterday, the market continued to inch higher. The S & P 500 closed at 2,907.95, up 3.64 points for the day.

Based on Tuesday's close percentage of 67%, we were biased for a continuation of the bull move.

But, quite frankly the thrust was not that strong.

We know that for two reasons.

The first is that the range for the day was only 8.54 points. With a daily average true range of 18.20 points, the daily range was only 47% of the average.

The second reason is that the daily price bar closed at 48% on the daily range. Basically, there is no bias to a violation of either the high or low.

But, the daily price bar formed a doji. A doji can mean indecision or it can be a pause before the move continues.

The question is how do we know which one it is?

With another close above 2,902.83, I am still biased for a move higher.

And with the market closing above that level on Tuesday, it should offer support on a pullback.

And yesterday's low was one point of that level.

Pre open, the S & P 500 is trading about 9 points higher.

This projects to an open around 2,916.

Support should be around yesterday's high, which was 2,912.36 and the close, which was 2,908.

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 closed at 11.75. The low yesterday came in at 11.66, or 7 cents under the 11.72 level we were looking for.

At this point, the key will be if the VIX can close under 11.72. A close under 11.72 would imply a drop to 9.38.

Resistance should now be at 12.50 and 13.28.

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

The upside objective remains to 2,939.50. 2,927.20 could offer some resistance on the upside.

Minor support is at 2,890.83.

Short term intra day 30 and 60 minute charts are still bullish. Technical support is now around 2,900. This level should offer support.

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
Minor level: 179.69
Minor level: 176.56
Major level: 175.00

The QQQ closed at 182.70. The objective should be up to 187.50, but the QQQ needs to clear 182.81. There is also technical resistance at 183, so this area will be key today.

Minor support is now at 182.03 and 182.42.

The short term 30 minute chart has crossed into a downtrend, so momentum has shifted 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 169.65. With the IWM holding the minor 169.53 level, look for a bounce off this level.

Watch 170.31. If the IWM cannot clear 170.31, I would expect a drop.

TLT:

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
Minor level: 116.80
Minor level: 116.02
Major level: 115.63

The TLT closed at 116.61. The TLT is clearly in oversold territory. But, a close today under 116.80 and the TLT should test 115.63.

The key will be the 115.63 level. If the TLT breaks under this level, it should head lower.

117.97 is a short term support resistance. And 116.80 is minor resistance.

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 113.88. Watch the 113.28 level. If this cannot hold as support, I would expect a further drop. Most likely a drop to 112.50.

114.06 should be minor resistance.

The gold miner index (GDX) did close above the lower band, which is 18.38. Wait for a few days to close above 18.38 before initiating any gold miner long positions.

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 75.10. The XLE managed to eke out a close above the 75 level.

74.61 should offer minor support. If the XLE can clear 75, I would expect it to continue higher. But, resistance could be at 75.78.

Short term momentum is shifting to the upside. The 30 minute chart just crossed into an uptrend. Technically support should be at 74.25.

Also, the 60-minute chart is close to crossing into an uptrend.

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 85.17. The FXY managed to close above the major 85.16 level. If the FXY can hold 85.16, it should bounce.

84.77 should offer short term support. A break under this level and expect the FXY to head lower.

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 closed at 218.37. Yesterday's low came at 215.30, or 33 cents under the support level we were looking for.

Watch the 215.63 level. If this level holds, Apple should bounce.

Technical resistance is at 222.

WATCH LIST:

Bullish Stocks: AMZN, ALGN, NFLX, HUM, NVDA, ADBE, BA, PANW, QQQ, AET, HON, CRM, UNP, GRUB, ADSK, CHKP

Bearish Stocks: GS, MLM, LRCX, BLUE, CRI,WLK, CELG, FSLR, TRP, BIG, CLVS, ACM, X, HUN, CARS

Be sure to check earnings release dates.