December 21, 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 - $1.55
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

ETE Long $14.05
Total Premium collected - $.30
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There were a few option positions that expired last Friday.? Both the GOGO and ETE calls expired.

And the LUK position expired as well.? Time will most likely show that the entry was early.

I am going to assume that the calls on VNR were assigned and you sold the stock at $3.? VNR traded above $3 early in the day and pulled back. At 3:00 EST, it was trading around $2.75 before running up and closing exactly at the $3 strike price.

VNR did announce a reduction in their distribution. They cut it from $.1175 to $.03 per month.

This is a quick reminder that the markets will close Thursday at 1:00 EST for Christmas Eve and will be closed all day on Friday for Christmas.

Extreme volatility continued last week.? From Monday to Wednesday, the S & P 500 moved up 83.46 points.

Then on Thursday and Friday it gave back 71.17 points.

For the week, the S & P closed down 6.85 points.

Doesn't seem like much, unless you look at intraday charts for the swings.

With triple witching last Friday, perhaps that led to some of the excess volatility.

I heard that last Friday had the highest volume of shares traded since the flash crash, back in 2010.

It looks like the markets are set to open to the upside this morning. The SPY is up about 1.20 pre open.

Look for 20.31 to be resistance on the VIX and support for the S & P to be around 2,006.

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 - 14.06
Major level - 12.50

The VIX closed Friday at 20.70, just above the 20.31 resistance level.

Watch where the VIX opens.? If it opens under 20.31, I would expect that level to be resistance.

There is also minor resistance at 21.88.

S & P 500 Cash Index: ?

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
Minor level - 2,039.10
Major level - 2,031.30
Minor level - 2,023.48
Minor level - 2,007.82
Major level - 2,000.00
Minor level - 1,992.18

Friday's low stopped about 5 points above the? major 2,000 level.

2,000 should be major support for the S & P. To move up, it will need two closes above 2,007.82.

Nasd 100 (QQQ): ?

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
Minor level - 108.60
Minor level - 107.03
Major level - 106.25

109.38 should be a major support level. Two closes above 110.16 and it should try and test 112.50.

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

A close today above 122.66 and the TLT should try and hit 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 continues to trade between the 103 and 100 levels. For an uptrend to even be considered, I would like to see two days that close above 103.13.

If that could happen, I would consider some miners.

XLE:

Major level - 62.50 *
Minor level - 61.72
Minor level - 60.16
Major level - 59.38
Minor level - 58.60
Minor level - 57.03
Major level - 56.25

The 59.38 objective was hit on Friday.

Two closes under 58.60 and the XLE should move to 56.25.

56.25 is the level I would not expect the XLE to break on the first drive down there.

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 hit the downside objective Friday and closed at 106.03. Apple is oversold on it's short term charts and it should bounce from here.

To move up, it will need two closes above 107.81.

Watch list:
Bullish Stocks: PNRA, CI, ULTA, DPS, ADBE, KMB, FSLR, QIHU, ELS,
NTES, TRIP, K, EXR

Bearish Stocks: CBRL, WBC, PVH, UNP, AXP, DVA, WDC,
DKS, CMI, BLUE, KEX, BURL, OUTR, CF, CLH, WES

Be sure to check earnings release dates.