September 21, 2017 - 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:

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APA Long Oct $47.50 Call at $3.45

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DIN Long December $40 call at $2.40
DIN Short December $45 call at $1.15

PANW Long Oct $145 Call at $2.44

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Yesterday saw some profit taking going into the Fed announcement at 2:00 EST. The market opened at 2,505.84 and profit taking took the S & P 500 down to 2,496.67 before the market staged a comeback.

After the 2:00 announcement, the market staged its comeback, rallying back to close at 2,508.24, only 60 cents under the open.

So that was a swing down of 9.17 points and a rally back of 11.57 points.

A total of 20.74 points if you caught both swings, on a day when the intra day range was only 12.18 points.

Compared to the average true range (ATR) of 12.69 points, you could say that yesterday's price action was considered normal. You may not have been around on Fed announcement days when the market would move 2 times the ATR. So, compared to those days, yesterday was rather quiet. At some point, you will see that type of move on Fed days.

Based on the rally back into the close, the S & P 500 formed a hammer bar. This is a bullish price bar. And based on the price bar, I would expect support around 2,502.50.

This is also around a minor support level, which is 2,502.

Would you have considered buying the rally?

The logic said you should. Why? Because both the 60 minute and 30 minute charts had moved into uptrends. And even better, was that the shorter term 10 minute chart was in an uptrend during the morning sell off.

On yesterday's webinar, I share a short term set up based on integrated the short term 30 minute and 10 minute charts. You can listen to a recording in the members area.

This is essentially the same pattern that set up yesterday in the markets.

Pre open, the S & P 500 is down about 2 points and should open slightly lower. Watch to see if the 2,502.50 holds as support.

Continue to follow the resistance levels.

Here are the Key Levels for the Markets:

$VIX:

Major level: 15.63
Minor level: 14.85
Minor level: 13.28
Major level: 12.50
Minor level: 11.72
Minor level: 10.16
Major level: 9.38 <
Minor level: 8.60
Minor level: 7.03
Major level: 6.25

The VIX closed at 9.78, down .40 for the day. It is creeping down to the 9.38 objective.

10.16 and 10.35 should be minor resistance. 9.96 should also offer resistance.

A minor support level is at 9.77.

$SPX:

Major level: 2,539.10
Minor level: 2,529.33
Minor level: 2,509.78 **
Major level: 2,500.00 < Hit!
Minor level: 2,492.20
Minor level: 2,476.00
Major level: 2,468.80
Minor level: 2,460.98
Minor level: 2,445.33
Major level: 2,437.50

2,509.78 is the next upside level. Two closes above 2,509.78 and the objective should be to 2,539.

2,502 should offer support. And watch the minor 2,504.90.

On the upside, 2,512.20 could offer resistance.

QQQ:

Major level: 150.00
Minor level: 148.44
Minor level: 145.31 ***
Major level: 143.75 <
Minor level: 142.18
Minor level: 139.06
Major level: 137.50
Minor level: 135.94
Minor level: 132.81

The QQQ closed at 145.35, just 4 cents above the minor 145.31 line. 150 should still be the active objective.

Minor support still be at the 145.51 & 145.31 area. If the QQQ can get above 145.51, expect it to head higher.

IWM:

Minor level: 144.53
Major level: 143.75
Minor level: 142.97
Minor level: 141.41
Major level: 140.63
Minor level: 139.85
Minor level: 138.28 ***
Major level: 137.50 <
Minor level: 136.72
Minor level: 135.15
Major level: 134.37

The IWM closed at 143.84, taking out our objective of 143.75. The IWM is within 20 cents of the high of 144.25, made on July 25th.

143.36 should offer minor support. And 144.53 minor resistance.

Short term charts remain bullish.

TLT:

Major level: 131.25
Major level: 130.47
Minor level: 128.91
Major level: 128.13
Minor level: 127.35
Minor level: 125.78 <
Major level: 125.00

The TLT closed at 125.91. The low for the day was 33 cents above the 125 objective.

125 should be support. Resistance is at 126.37 to 126.56.

GLD:

Major level: 131.25
Minor level: 130.47
Minor level: 128.91
Major level: 128.13
Minor level: 127.35
Minor level: 125.78 **
Major level: 125.00 <
Minor level: 124.22 **
Minor level: 122.66
Major level: 121.88
Minor level: 120.32

The GLD closed at 123.64, under the 124.22 level. If the GLD closed today under 124.22, the objective should be to 121.88.

123.05 should be minor support and resistance should be at 124.22.

XLE:

Major level: 68.76
Minor level: 67.97
Minor level: 66.41 **
Major level: 65.63 <
Minor level: 64.85
Minor level: 63.28
Major level: 62.50
Minor level: 61.72
Minor level: 60.16
Major level: 59.38

The XLE closed at 66.84. A close today above 66.41 and the XLE should move up to 68.76.

Support should now be at 66.60. 67.19 is resistance.

I need to point out that the XLE is approaching its midband on the daily chart. 67.68 is the midband and a level to watch.

FXY:

Major level: 89.06
Minor level: 88.67
Minor level: 87.89
Major level: 87.50
Minor level: 87.11
Minor level: 86.33
Major level: 85.94 <
Minor level: 85.55 **
Minor level: 84.77
Major level: 84.38

The FXY continues to sell off and closed at 85.55, exactly on the minor level. A close today under 85.55 and the FXY should drop to 84.38.

Look for resistance at 85.94. And support at 85.16.

AAPL:

Major levels for Apple are 165.63, 162.50, 159.38, 156.25, 153.13, and 150.

Apple sold off and closed at 156.07. 157.03 is minor resistance. On the downside, if Apple breaks under 155.47, it could test the major 153.13 level. Watch the 155.47 level today.

WATCH LIST:

Bullish Stocks: TSLA, BIDU, FDX, MMM, AMGN, SPZ, ALGN, LLL, RTN, NVDA, COST, CMI, SWK, ALXN, CME, CAT, RCL, UNP

Bearish Stocks: SBNY, PZZA, UBNT, DISH, MDLZ, MNK, RDUS, MDCO

Be sure to check earnings release dates.