February 11, 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.

Current Positions
GOGO? Long at $19.93
Total Premium collected - $1.95

X Long at $14
Total Premium collected - $.89

ASNA Long at $14.20
Total Premium collected - $.75

ETE Long $14.05
Total Premium collected - $1.05

P Long $13.38
Short Jan $14 Call - $.35

SFLY - Long Feb $40 Put @ $1.90
SFLY - Long Feb $37.50 Put @ $.65

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The markets had a small bounce off the testimony of Janet Yellen, only to fail at the 1,875 level and sell off into the close.

Her testimony did nothing to stem the fears of investors and traders.

And speaking of her testimony, I did manage to catch a bit of it before the webinar yesterday.

I found it interesting that Congress put the blame on the fed for the mortgage crisis.

Wow. I could go on talking about this fiasco, but that is yesterdays news.

Yellen said that the Fed still intends to raise rates gradually, but there is no set course. She did say they would slow the rate of increase if the economy were to disappoint.

If you look at a chart of the TLT, it appears that the market does not believe that any more hikes are in the equation.

As for appeasing investors, I suspect she did little in that regard, as evidenced by the fact that the markets will open severely to the downside.

The S & P 500 is down in the pre market almost 30 points.
Based on an open down around 30 points, the S & P 500 will be under the lower extreme bollinger band by about 40 points.

It will also be within 10 points of the major 1,812.50 support level.

This was the level that the markets reversed at last month.
If this level cannot hold, I fully expect a move to 1,750.

Here are the key levels for the markets.

VIX:

Major level - 37.50
Minor level - 32.81
Major level - 31.25
Minor level - 29.68
Minor level - 26.56 *
Major level - 25.00
Minor level - 23.44
Minor level - 20.31
Major level - 18.75
Minor level - 17.19

It will still need two closes above 26.56 for the objective to be 31.25.

25 and 23.44 should act as support.

S & P 500 Cash Index:

Minor level - 1,890.62
Major level - 1,875.00
Minor level - 1,859.38 *
Minor level - 1,828.12
Major level - 1,812.50
Minor level - 1,796.88
Minor level - 1,765.62
Major level - 1,750.00

1875 held as resistance yesterday.

Objective should be to 1,812.50.

Oversold as evidenced by the fact that the market is trading under it's extreme bollinger band on the daily chart.

Nasd 100 (QQQ):

Major level - 103.13
Minor level - 102.35
Minor level - 100.78
Major level - 100.00
Minor level - 99.21
Minor level - 97.66
Major level - 96.88 *
Minor level - 96.09
Major level - 93.75
Major level - 90.63

Higher levels should act as resistance.
The move down to the 87 - 90 area has been confirmed.

Like the S & P, the QQQ is oversold on it's daily chart.

TLT:

Major level - 137.50
Minor level - 136.71
Minor level - 132.03 *
Major level - 131.25
Minor level - 128.91 *
Major level - 128.13
Minor level - 127.34
Minor level - 125.78
Major level - 125.00

The TLT did close above 132.03 yesterday, so if it can close above that level today, the objective becomes 134.38.

Lower levels should act as support.

GLD:

Major level - 115.63
Minor level - 113.28 *
Major level - 112.50
Minor level - 111.71
Minor level - 110.16
Major level - 109.38

Objective should be to 115.63. Like the TLT, it has gone parabolic.

Lower levels should act as support.

XLE:

Major level - 59.38
Minor level - 58.60
Minor level - 57.03
Major level - 56.25
Minor level - 54.69
Minor level - 53.19
Major level - 53.13 *
Minor level - 51.56
Major level - 50.00
Minor level - 43.75

A reversal off of 53.13 should produce a quick upmove.
Oversold and due for a bounce.

The XLE is hanging just above the 53.13. level. If it fails here it should drop to 50.

Apple:

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

Apple is desperately trying to hold the 93.75 level. It did bounce off the lower band.

At this point, the best set up is to see if it closes under 93.75.
If it does, that will tell you to be short for a move down the 75 area.

Watch list:
Bullish Stocks: MKC, FXE, WEC, SAFM, AEP TSN, ED, FAST

Bearish Stocks: TSLA, BWLD, ALXN, MNST, PII, BIDU, BDX, VRTX, SWK, GILD, LAD, HAR, TRIP, BABA, Q

Be sure to check earnings release dates.