August 4, 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 - $.70

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Today's Working Orders

No working orders.

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The market continues to ping pong back and forth.
Perhaps it is the slow summer trading or it is that everyone is waiting for Friday's job report.

I am not sure which one it is, but the simple beauty of tracking the VIX is that it can help to prevent mistakes.

For example, yesterday, the VIX opened at 12.85, or 35 cents above the key 12.50 line.

At that point, you would expect another rally in the VIX.
The VIX dropped to a low of 12.32 before moving back up to 13.55.

At the same time, the S & P 500 reversed off of 2,104.65 and dropped to 2,087.31.

That was a move of 17.34.

When the VIX stalled, it did so right at the 200 ema on the 30 minute chart, which also happened to be the midband on the 10 minute chart.

The question at that time was where would you expect the VIX to go?

If you said 12.50, you would be correct.

Why you ask?? On the pullback, the VIX broke under 12.50 to a low of 12.32, so you would expect a retest of 12.50.

And in fact, it did.? The VIX dropped to a low of 12.44 and settled at 12.56, just 6 cents above 12.50.

So, the key today will be to see where the VIX opens.

An open above 12.50 and look for 12.50 to be support.
An open below and it should be resistance.

There is also the major level of 14.06 that should act as resistance.

As the markets chop around, focusing on the VIX and the S & P for shorter term trading can be particular useful.

Here are the key levels for the markets.

Stocks...
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VIX: ?

Major level - 17.19
Major level - 15.63
Major level - 14.06
Minor level - 13.67
Minor level - 12.89
Major level - 12.50
Minor level - 12.11
Major level - 10.94

Watch where the VIX opens.? A lower open and expect the levels to the upside to act as resistance.

A higher open and the levels should be support.

The VIX is once again flirting with the 12.50 level, which makes me cautious it could jump from here. ?

S & P 500 Cash Index: ?

Minor level - 2,132.82
Major level - 2,125.00
Minor level - 2,117.18
Minor level - 2,101.60
Major level - 2,093.80
Minor level - 2,085.98
Minor level - 2,070.32
Major level - 2,062.50

The objective still remains to 2,125.? Shorter timeframes still remain in uptrends, so you want to be biased to the longside.

Reversals down on the VIX are the triggers to go long.

Nasd 100 (QQQ): ?

Major level - 115.63
Minor level - 113.28
Major level - 112.50
Minor level - 112.11
Minor level - 111.33
Major level - 110.94
Minor level - 110.16
Major level - 109.38

QQQ flirting with the 112.50 level.? Support should be at 110.94.

TLT: ?

Major level - 125
Minor level - 122.66? *
Major level - 121.88
Minor level - 119.53 ?
Major level - 118.75
Minor level - 117.96
Minor level - 116.41
Major level - 115.63

Yesterday was the first close above 122.66.? A close today above and the objective should be 125.

125 should be a strong level of resistance.? How the TLT trades around this level will be key.

GLD:

Major level - 109.38
Minor level - 107.03
Major level - 106.25
Minor level - 105.46
Minor level - 103.91
Major level - 103.13
Minor level - 102.34
Major level - 100

The GLD closed lower, which indicates further movement to the downside.

The objective should be to 103.

XLE:

Major level -? 75 ?
Minor level - 74.21
Minor level - 72.66
Major level - 71.88
Minor level - 71.09
Major level - 68.75
Minor level - 67.96
Major level - 65.63

The XLE did break under 68.75, closing yesterday at 67.92.

I am still expecting a bounce here and a push up to possibly the 75 level.? That would be a great place to get short.? It may not get there and may stall around 72.

Sell against resistance levels.

Watch list:
Bullish Stocks:? GOOGL, REGN, AMZN, AGN, AMGN. PANW, BWLD, GD, MNST, NKE, SKX, DIS, CVS, RAI, NKE, V, SBUX, GIS

Bearish Stocks: BIDU, RL, CVX, BEN, BG, CVX, Z, CAT, EOG, DECK, XLE, LNG, UA, TWTR

Be sure to check earnings release dates.