December 8, 2015 - 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 - $1.25
Short December $20 Call - $.30

NCR Long Jan 16 $27 Call
Net Debit - $.80

X Long at $14
Total Premium collected - $.89

ASNA Long at $14.20
Total Premium collected - $.75

LUK Long December $18 Call - $.35
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The volatility continues this week, with the S & P 500 having a 24 points intraday range.? It rallied back about 11 points, after the VIX failed at 17.18, which you may recognize as a short term resistance level.

Even with a 24 point range, the S & P had an inside day on the daily charts.

Usually you can expect a range expansion after an inside day.? And it certainly appears that way, with the S & P 500 down 21.50 points before the open.

Part of this drag on the markets is being blamed on oil dropping to new lows.

The spot price was down over 6% yesterday.? And the XLE was down close to 4%.

What seems to be shaping up is that the pipeline stocks are having selling climaxes.

In the last two days, KMI has traded over 288 million shares.? When you compare this to an average volume of 24 million shares, you can see a flush out in the making.

At some point, there will be opportunity in these stocks.? Patience is a virtue though.

Here are the key levels for the markets.
?
VIX:?

Minor level - 26.56
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

The VIX has held above the 14.06 level.? And yesterday, the VIX bounced off the 17.19 level (actually the pivot high was 17.18.)

For sure, the VIX will bounce this morning with the markets down so much.? The logical retest would be to 18.75.

S & P 500 Cash Index:?

Major level - 2,125.00
Minor level - 2,101.62
Major level - 2,093.80 *
Minor level - 2,085.98 *
Minor level - 2,070.33
Major level - 2,062.50
Minor level - 2,054.68
Major level - 2,031.30

The S & P 500 dropped under the 2,070 level yesterday, before reclaiming it.

I mentioned that a close above 2,093.80 would be bullish and the S & P could not get back to that level.

2,031.30 should be a strong support level.

Nasd 100 (QQQ):?

Minor level - 116.41 *
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 QQQ closed at 114.16 yesterday, so a close today under 114.85 and it should drop to 112.50.

Major support should be at 109.38.

TLT:?

Major level - 125
Minor level - 124.22
Minor level - 122.66
Major level - 121.88
Minor level - 121.09
Minor level - 119.53 *
Major level - 118.75
Minor level - 117.97
Minor level - 116.40
Major level - 115.62

The TLT achieved the 121.88 objective yesterday.
Two closes above 122.66 and the objective should be back to 125.

Lower levels should act as support.

GLD:

Major level - 106.25
Minor level - 105.46
Minor level - 103.91
Major level - 103.13
Minor level - 102.34
Minor level - 100.78
Major level - 100.00
Major level - 96.88

The GLD could not hold the 103.91 level and dropped to under 103.13.

Two closes under 102.34 and the GLD should drop to 100.

XLE:

Minor level - 67.97 *
Minor level - 66.41
Major level - 65.63
Minor level - 64.85
Major level - 62.50
Minor level - 61.72 *
Major level - 59.38

The XLE could not hold 64.85 and dropped to under the 62.50 level yesterday.

Two closes under 61.72 and the XLE should test 59.38.
This market is in a bonafide crash and one to avoid.

Shorting also becomes risky because most stocks are oversold.

Apple:

Major levels for Apple are 125, 118.75, 112.50, 106.25, 100, and 93.75.
106 should be a major support level for Apple.?

Apple is back to the mid band on the daily chart.? The midband is 119.01 and yesterday's high was 119.86.

If it cannot get get above the midband, I expect a pullback.

Watch list:
Bullish Stocks: GOOGL, PANW, ULTA, COST, NFLX, DY, FSLR,? ACN, LLY, EXR, CLX, QIHU, CRM

Bearish Stocks: CMG, CBRL, SRCL, PVH, UNP, AXP, AKAM, CAR, BIG, HAIN, FOSL

Be sure to check earnings release dates.