September 26, 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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Short Sept 28th - $17 Call @ $0.33

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Yesterday, we were contemplating whether the low for the week was in. And as it turns out, the low yesterday did not take out Monday's low.

Tuesday's low came in at 2,913.70 and Monday's low was 2,912.63.

This is the level to watch today.

What makes this all the more significant is that the lows the past two days are right in the middle of the support from last week's weekly price bar.

That area is between 2,913 to 2,917.

Having said that, for the day, the S & P 500 closed at 18% of the daily bar.  This tells us that there is almost a 90% chance that yesterday's low should be violated before the high.

And the resistance area from yesterday's daily bar is in the 2,919 area.

So, there are multiple areas of confluence around the same area.

Today, at 2:00 PM is the Fed announcement regarding interest rates.  The general consensus is for a rate hike today.

This type of announcement can produce excess volatility.

Pre open, the S & P 500 is trading about 6 points higher.  This projects to an open around 2,921.

Watch the levels I mentioned above for support on a pullback.

Today is also our webinar at 12:00 PM EST.  I hope to see you on the webinar.

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 12.45.  Yesterday's high came in at 12.50, or 10 cents above the 12.50 level.

I am still biased for a move lower in the VIX.  And as I mentioned yesterday, resistance is still at 12.50 and 12.89.  12.50 remains as resistance until it is violated.

At this point, the VIX would still need two closes under 11.72 to drop to 9.38.

SPX:

Major level: 2,988.30 XXX
Minor level: 2,976.10
Minor level: 2.951.70
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

At this point, the S & P 500 has had two closes under the minor 2,927.28 level.  This level should be resistance on a rally.

And with a projected open about 6 points under it, watch this level today.

To move higher, the S & P 500 will need to recapture this level.

2,907.70 should offer minor support on a pullback.

Also, the short term intra day 30 and 60 minute charts still remain bullish.  Technical support is now around 2,888. The S & P 500 could drop as much as 27 points without affecting this uptrend.

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 184.14. The 187.50 level is key for the QQQ. If it can clear this level, I would expect the QQQ to head higher.

The 187.50 level should be the objective.  182.81 is minor support.

The short term 30 minute chart remains in a downtrend, so momentum continues to be to the downside. But, technical support is at 183.47.

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 170.03.  With two closes above 169.53, the objective for the IWM should be 171.88.

169.53 should offer support.

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 reversed to close at 116.68.  Biased for a test of 115.63.

116.41 is a minor support level.  A break under 116.41 and the TLT should hit the 115.63 objective.

With an anticipated rate hike tomorrow, the TLT should be volatile.

Short term charts remain bearish.

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 113.65, closing just under the minor 113.67 resistance level.

Resistance should be at 113.67, and at 114.06.  I would not expect a move higher than 114.06.

The GDX is retesting the lower band on the daily.  If it holds, a reversal could be coming.

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 76.69.  With a close above 75.78, the objective should now be 78.13.

76.56 should offer minor support now. And minor resistance is at 77.34.  If the XLE can clear this level, it should move up to 78.13.

Both short term charts are in uptrends.  The XLE should head higher.

The next pullback should be opportunity to buy.

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 **
Minor level: 84.58
Major level: 84.38

The FXY closed at 84.65.  The FXY is now within reach of the 84.38 level.

84.38 is a key support level.  And 84.77 is a minor resistance level.

Short term charts remain bearish.

AAPL:

Major level: 225.00
Minor level: 223.44
Minor level: 220.31
Major level: 218.75
Minor level: 217.19
Minor level: 214.06
Major level: 212.50

Apple closed at 222.19.  Apple got under 217.19, and reversed to close higher. A retest of the upper band, which is 228.63 is likely.

The 30 minute chart is still in a downtrend. And yesterday, Apple consolidated right at the midband, which is 222.47.  Apple needs to clear this level to head higher.

WATCH LIST:

Bullish Stocks: BA, HUM, ANTM, BDX, FLT, MA, HD, AET, AMGN, CME, HON, EW, UNP, CLX, RACE, ZBH, ALXN, NKE, CVS

Bearish Stocks: MLM, BLUE, SAFM, MAN, R, PRGO, TPX, LEN, MD, GIS, BRKR, JD, HAIN

Be sure to check earnings release dates.