September 28, 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

PANW Long Oct $145 Call at $2.44

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Yesterday, the S & P 500 gapped up off the open and ran to a high of 2,507.60, before profit taking set in. From there it dropped to a low of 2,495.91.

The first top was 2.18 points under the upside level of 2,509.78. This is the next upside confirming line and since breaking the major 2,500 level, the market has now has made three attempts to clear it.

When the market stalled out at around 11:00 EST, the low was 2,495.91. And yesterday, I mentioned that support should be in the 2,494 to 2,496 area.

So, the low for the day was right in the support area identified yesterday before the open. Congratulations if you bought the low of the day!

Even with poor leverage on a Wednesday, the move was still big enough to see the $149 weekly SPY call go from $.62 to $1.70.

That's if you bought at the low of the day.

These are the calls that expire this coming Friday. Had this move happened on a Friday, I am guessing that those at the money calls could have bought for about $.25. That is the leverage of options that expire the same day.

But, I digress. I had two friends of mine tell me yesterday they were short. One was short the SPY (long puts) from Tuesday and the other friend had puts on BIDU.

I told both of them that they were better off buying the short term oversold conditions. Why?

Both the SPX and BIDU had both their 30 and 60 minute charts in uptrend formations. This tells you the short term trend is bullish.

So, shorting would be a counter trend trade and one that I do not advise. Unless you are experienced. If you do trade the counter trend move, I suggest using a smaller position size.

Back to the markets.

The S & P 500 topped out at 2,511.75. Yesterday was the first day above 2,509.78. But, the market could not close above it. For the day, the market closed at 2,507.04.

It may not seem like a big difference, but it tells us that the market still needs two closes above 2,509.78 to continue higher.

Support are from yesterday's daily price bar is in the 2,504 to 2,505 area.

Pre open, the market is selling off about 4 points, so watch the support are above.

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 9.87. The high for the day was 10.42, just above the 10.16 level. And the VIX sold off under 10.16.

The low was 9.63, just 25 cents above the 9.38 level.

10.16 is still minor resistance and 9.38 should be support.

$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

Support should be at 2,500 and 2,502. Watch the 2,505 level on the upside.

If the S & P 500 can get above 2,505, I would expect that level to offer support.

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 144.46. 143.75 should now offer support.

And 144.14 should also offer support. Minor resistance is at 144.92.

IWM:

Major level: 150.00
Minor level: 149.22
Minor level: 147.66 **
Major level: 146.88 <
Minor level: 145.32
Minor level: 144.53 **
Major level: 143.75
Minor level: 142.97
Minor level: 141.41
Major level: 140.63

The IWM closed at 147.44, breaking through the 146.88 level.

Next level is 147.66. Two closes above that level the objective becomes 150.

146.09 is minor support and 148.44 is minor resistance.

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
Minor level: 124.61

The TLT gapped down and closed at 124.85. At this point, I would expect resistance at 125.78.

To move lower, the TLT will need two closes under 124.61. Minor support is at 123.83.

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 gapped down and closed at 121.98. The low for the day was 121.88, which was the objective.

Minor support is at 121.09. If the GLD breaks under that level, expect it to move lower. 122.66 is minor resistance.

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 68.43. Objective should still be to 68.76.

68.55 is minor resistance. And 68.26 is minor support.

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 85.20, under the 85.55 support level. A close today under 85.55 and the FXY should drop to 84.38.

At this point, 85.94 should be strong resistance. And drop down to the 81 area is possible.

AAPL:

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

I would expect resistance at the 156 area.

Apple did bounce from its oversold condition. Oversold in that it was under the lower bands on the 30 & 60 minute charts. A retest of the lower bands in probably.

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.