April 22, 2016 – 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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The S & P 500 sold off yesterday and closed at 2,091.48.? This is significant because it closed under the 2,109 level. The implication is that if the S & P closed under 2,109 today, then it should move down to 2,062.50.

Yesterday’s price action was also a bearish 3 close reversal.? This is the reversal price bar that I mentioned on this week’s webinar.

Yesterday’s close reversed three prior bullish closes.

This reversal just happened to coincide with the VIX stopping at 12.50 on Wednesday.

I would have expected the VIX to close above 14.06 yesterday, however it didn’t.? It hit a high of 14.14 on the day and ended up closing underneath it, at 13.95.

This tells me that the market will most likely bounce around a bit before the next move continues.? This allows an opportunity to trade in and out of the VIX booking some profits as it tries to bottom.

You should have closed out the VRTX position yesterday.

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 – 15.63
Minor level – 14.06 *
Major level – 12.50 *

For the VIX to move up, I would expect a move up to 14.84.? And I would expect some resistance at that level.

12.50 should be major support.
?
S & P 500 Cash Index:?

Major level – 2,125.00
Minor level – 2,109.38 *
Minor level – 2,078.12
Major level – 2,062.50
Minor level – 2,046.88
Minor level – 2,015.62
Major level – 2,000.00

I mentioned that 2,109.38 should be a level to watch.

At this point, if the S & P 500 does close under that level, I would expect a move down to 2,062.50.

2,078.12 should be support.

Nasd 100 (QQQ):?

Major level – 112.50
Minor level – 111.71
Minor level – 110.16 *
Major level – 109.38
Minor level – 108.60
Minor level – 107.03
Major level – 106.25
Minor level – 105.46
Minor level – 103.91
Major level – 103.13

The QQQ closed at 110.65 yesterday.? It continues to hold the 110.16 level.? If the QQQ cannot get through this level, it could drop sharply.

Follow the VIX and if it heads up, expect the QQQ to move down.

TLT:?

Major level – 134.38
Minor level – 133.59
Minor level – 132.03 *
Major level – 131.25 *
Minor level – 130.46
Minor level – 128.91
Major level – 128.13

I mentioned the TLT testing the 128.13 level and that is where it is.

It closed yesterday at 128.69 and had a low a few cents above that level.

If the TLT can hold the 128.91 level for two days, look for a move up to 131.

GLD:

Major level – 125.00
Major level – 121.88
Minor level – 121.10
Minor level – 119.53 *
Major level – 118.75 *
Minor level – 117.96
Minor level – 116.41
Major level – 115.63
Minor level – 114.85

The GLD closed yesterday at 119.42, so it still needs two closes above 119.53 to move up to 121.88.

118.75 should be support.

XLE:

Major level – 68.75
Minor level – 67.96
Minor level – 66.41
Major level – 65.63
Minor level – 64.85
Minor level – 63.28 *
Major level – 62.50
Minor level – 61.72 *

The XLE still needs two closes above 66.41 to move up to the next objective, which is 68.75.

Major support is at 62.50.

Apple:

Major levels for Apple are 112.50, 106.25, 100, 93.75, and 87.50.

Apple is now under the 106.25 level.? $104.69 should be strong support.? $100 should also strong support.

Watch list:
Bullish Stocks: GOOGL, AMZN, AYI, BIDU, BDX, MMM, LLL, HD, ACN, HON, ALGN

Bearish Stocks: AGN, PANW, AGU, TSO, DDS, ZBRA, VLO, AKAM, STX, NTAP

Be sure to check earnings release dates.