August 7, 2014 - 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 Jim Parker, 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
No Positions
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Today's Working Orders
SELL?USAU?(30 yr. Bond Futures)?@ 140.15
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Stocks...
Spu's...closing back above 1940 will put the Bulls firmly back in control.
1875 is my buy zone. This is the spot I'm buying the Index to see how big of a bounce I can get.
Nasd 100...3850 will be pivotal. Price action below would lead to a test of the 3800 level. This is a good place to look for another bounce.
VIX...14.80 is first support. Only a couple of closes above 17.75 would lead to higher prices and a much bigger sell off in the Equity indices.
IBB...closes over 255 are needed for upside momentum.
Nikkei...yesterday's low was the 200 DMA @ 15025 matching the 102 level USD/JPY which is Yen resistance. Look for a bounce toward 15,400 as long as this level holds.
DAX...is at a level I'd prefer to buy before I sell. After a 1000 point break I would not be looking to get rewarded trading from the short side.
This Index could easily rally a couple of hundred points toward 9400 resistance.
XLP...is trying to bottom with yesterday's ORH. As long as this maintains above 43.25 the pattern is good.
XLK...shows a breakdown on the weekly charts. 37.70 would be a place to nibble at the Long side with a tight stop.
Bonds...
30 yr. Bonds...136.21 should be used as the short term pivot. Good above/negative below.
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FX...
USD/JPY.... 102.10 is Yen resistance, sell rallies not breaks.
EURO...needs a couple of days under 133.30 for more downside. The shorts will get squeezed out with price action over 134.25 resistance.
Sell rallies/ not breaks.
AUD/USD...has gotten hammered with a Risk off board. Any prints near or just under 92 will be a bear trap the first time down.
EUR/AUD...144.60 is the 50 DMA resistance level. If the Equity Indices hold firm I doubt you'll see prints over last night's high of 144.49.
Commodities...
OIL...96.05 is weekly mvg avg support zone. This is where the shorts need to pay attention today, as this level can trap the directional players.
Brent...103.95 is an area to reevaluate the price action. This is a pivotal level on a monthly chart.
Gold...needs closes over 1313-14 to gain any upside momentum.
General Comments orValuable Insight
The Board is a SPU/Bond spread. This has not changed.
The single biggest takeaway from revisiting the charts over the past week is that the spread has closed under it's 200 DMA for the first time since Dec 2012.
Every other attempt at the 200 DMA fell short for the past 2 years with monster rallies that followed.
Without some confirmation from the spread of bottoming action, Investors should not be looking for a longer term buy just yet.
The technical models are broken in the Spu's, Nasd & Dax.
They will need time to find a bottom before they can change direction.
The B teams are manning the desks at the macro shops throughout Europe.
A little patience will be required to let the board set up and traders to distill their thoughts with some vino on the beach, before big directional money gets committed for the fall trade.
This simply means you should be in no hurry to add risk. Trade the names (look for opportunity) where you have definable risk.
For Medium Term Outlook click here.
For Glossary of terms and abbreviations click here.