August 27, 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
Premium collected - $1.25

NCR Long Jan 15 $27 Call
NCR Short Jan 15 $32 Call
Net Debit - $1.70

VIPS Long at $18.88
Short August 28th - $19 Call @ $.75

CIEN Long at $21.91
Short August 28th - $22 Call @ $.42

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Before I begin today's update,? I just want to mention that I received an email yesterday from a member whom I will only identify as B.

B asked why I did not suggest selling naked puts on CIEN, instead of the covered call strategy.

Just so you know, I will not suggest selling naked puts because I know there are some members who are not permitted to do that strategy.

B is correct in suggesting that as an alternative.? In fact, there is no difference in the risk profile between selling naked puts or putting on a covered call.

You can choose a strategy that suits yourself.

Now onto the markets.

Yesterday, the markets started their bounce from this oversold condition.

And all major markets managed to close above the lower extreme Bollinger Band on the 60 minute chart.

And pre market, it appears we should see some follow through this morning.

Watch the VIX and if continues down, the markets should continue up.

Here are the key levels for the markets.

Stocks...
?
VIX:?

Major level - 50.00
Major level - 43.75
Major level - 37.50
Major level - 31.25
Minor level - 29.68
Major level - 25.00
Major level - 18.75

Look for 31.25 to be resistance.? Two closes under 29.68 and the VIX should drop to 25.

The VIX just closed under the upper Bollinger Band on the 60 minute chart. That level is 31.72 and should also act as resistance.

S & P 500 Cash Index:?

Major level - 1,968.80
Minor level - 1,945.32
Major level - 1,937.50
Major level - 1,906.30
Minor level - 1,882.83
Major level - 1,875.00
Major level - 1,843.80

As I mentioned, the S& P managed to close above the lower band on the 60 minute chart, which is 1,935.17.? This should now act as support.

Two closes above 1,945.32 and the objective is 1,968.80.

Nasd 100 (QQQ):?

Major level - 106.25
Minor level - 103.91 *
Major level - 103.13
Major level - 100
Minor level - 99.21
Major level - 96.88
Major level - 93.75
Major level - 90.63
Major level - 87.50

Like the S & P, the QQQ managed to close back above the lower band on the 60 minute chart.

That price level is 100.93.?

A close above 103.91 today and the objective is to 106.25.
Still remains the strongest market.

TLT:?

Major level - 131.25
Major level - 128.13
Minor level - 125.78
Major level - 125
Minor level - 124.22
Minor level - 122.66?
Major level - 121.88
Minor level - 121.09 *
Major level - 118.75

The TLT did retest the 121.88 level.? It closed yesterday at 121.93.? 121.09 should act as support.

Short term timeframes remain in uptrends.

GLD:

Major level - 115.63
Major level - 112.50
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

Yesterday was the first close? under 108.60.? A close today under that level and the objective is to 106.25.

106.25 should be strong support.

Lower levels should act as support.

XLE:
?
Major level - 65.63
Minor level - 64.85
Major level - 62.50
Minor level - 61.72
Major level - 59.38
Minor level - 58.60
Major level - 56.25

The XLE bounced back above the 59.38 level yesterday.
The XLE is at at a key inflection point. A drop under 56.25 and it heads lower.? But, it is possible it could base around here and start to move up.

Apple:

Major levels for Apple are 112.50, 106.25, 100, 93.75 and 87.50.
100 should be a major support level for Apple.?

Apple closed yesterday at 109.69.? A close today above 107.81 and Apple should move up to 112.50.

Watch list:
Bullish Stocks:? PANW, ULTA, MNST, CELG, COST, MA, EA

Bearish Stocks: LNKD, FDX, BIDU, IBM, MMM, CMI, RL, DDS, UNP,? ASML, WYNN, DECK, XLE, FOSL,QCOM, SCTY

Be sure to check earnings release dates.