September 25, 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:

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

DYN Long at $12.55
Premium Collected $0.48

APA Long Oct $47.50 Call at $3.45

SNAP Long at $15.20

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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As we wind down to the end of the 3rd quarter of 2017, the market continues to tick along. The contraction pattern I have mentioned also continues.

Friday, the S & P 500 managed to close 1.62 to the upside, at 2,502.22.

After gapping down, the market found support at 2,496.54, which happens to be the support area I mentioned in Friday's update.

From there, it rallied to close back above the major 2,500 level.

The range for the day was only 6.93 points. Compared to the average true range of 12.05, you can see that once again the market was well under the average.

For the week, it also contracted. The weekly range was only 12.31 points. Compared with the weekly average true range (ATR) of 35.18 points, the range for the week was only 35% of the ATR.

For the week, the S & P 500 formed an almost perfect doji bar. A doji typically has the close almost the same as the open and is a narrow range bar.

The week opened at 2,502.51 and closed at 2,502.22, so that certainly qualifies. And with the contraction last week, it also qualifies it as a doji bar.

So what does this imply?

A doji can be interpreted two ways. The first is that it mean indecision. Or it can mean a pause before the move continues.

Based on the doji last week, the key support level should be at 2,502, which is approximately the close. You also want to monitor the high, which was 2,508.85 and the low, which was 2,496.54.

The short term 30 and 60 minute charts for the S & P 500 are still uptrending, so I am still biased to the upside should the market sell off.

We also need to be mindful that the VIX is almost down to the 9.38 objective, which is also the long term support level for the VIX.

A bounce off this level would indicate that the market should pullback.

Pre open, the S & P 500 is trading slightly to the downside, so a lower open is expected.

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 9.59, down .08 for the day. It continues to move down to the 9.38 objective.

10.16 should be minor resistance. 8.98 is a minor support level.

$SPX:

Major level: 2,539.10
Minor level: 2,529.33
Minor level: 2,509.78 **
Major level: 2,500.00
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

The key level on the upside is 2,509.78 and on the downside, 2,492.20.

2,498 is a minor support level on the downside, along with 2,494.

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 144.32. A move down to test 143.75 is likely. But, I would expect support at 143.75.

145.31 should be resistance. And watch the 142.97 level for support.

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 144.30, still holding above the 143.75 level. The IWM closed above the prior high.

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 126.20. A close today above 125.78 and the TLT could test 128.13.

125.98 should be support. Resistance is at 126.97.

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 123.24. If the GLD can hold 122.66, it should test 125.

122.66 should be minor support and resistance should be at 123.44.

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 67.20. The objective should be to 68.76.

Support should now be at 66.80. 67.58 is resistance.

67.69 is the midband on the daily chart and a level to watch. Watch to see if the XLE can clear 67.69.

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 closed at 85.75. A close today above 85.55 and the FXY should test 85.94. I would expect resistance at 85.94. If that does not hold, then 87.50 should.

Look for resistance at 86.33. And support at 85.16.

AAPL:

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

Apple continued its selloff and closed at 151.89. A break under 150 and Apple should bounce for a while before finding support.

On the downside, 146.88 is a support level that most likely should not be violated. If it is, look for Apple to head lower.

WATCH LIST:

Bullish Stocks: GOOGL, LMT, NOC, BA, BIDU, FDX, GD, DPZ, LLL, NFLX, ALGN, RTN, MCO, CAT, MON, ALB, CME,

Bearish Stocks: WBA, DXCM, K, LULU, UAL, GIS, TCO, CPB, FNSR

Be sure to check earnings release dates.