February 2, 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
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X Long at $14
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ASNA Long at $14.20
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ETE Long $14.05
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P Long $13.38
Short Jan $14 Call - $.35

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Google is up just over $40 pre market based on their earnings release.

This week we will see a few high profile companies reporting, including CMG this afternoon. And LNKD, which reports on Thursday, after the bell.

The question is whether earnings will be enough to turn the markets.

Before the open, the markets are down across the board.

There is a very high probability that the S & P 500 will retest the 1,878 level.

This is because the S & P broke under the bottom band on the daily chart. When that happens, I expect a retest of the bottom band. The question becomes when and at price will the market stall.

I will outline the specific levels where support should be for the markets.

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

The 18.75 level should still be the objective at this point.

The 23.44 and 25 levels should act as resistance.

S & P 500 Cash Index:

Major level - 2,000.00
Minor level - 1,953.12
Major level - 1,937.50
Minor level - 1,921.88
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

The S & P 500 did manage to close above the 1,937 level yesterday.

To move up, the S & P would need two closes above 1,953. The objective would then become 2,000.

At this point, I would expect 1,921.88 to act as support. This is a level to watch closely.

Short term intra day charts have shifted into uptrends.
Showing some signs of bullishness.

The S & P closed back above the lower band on the daily. A retest should occur at some point.

Nasd 100 (QQQ):

Major level - 106.25
Minor level - 105.47
Minor level - 103.91 *
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

The objective should still be to 106 level.

Support should be at 102.34 and 103.

TLT:

Major level - 131.25
Minor level - 128.91 *
Major level - 128.13
Minor level - 127.34 *
Minor level - 125.78
Major level - 125.00
Minor level - 124.22
Minor level - 122.66

The 128.13 level should still be the objective.
To move beyond 128.13, the TLT would need two closes above 128.91.

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
Minor level - 100.78
Major level - 100.00

As I have written before, if the GLD can move up to 109 on this drive, it is very possible the long term
downtrend is over.

And 109 should be the objective for the GLD.

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 - 51.56
Major level - 50.00
Minor level - 43.75

The XLE did have two closes above 57.03, so the objective should be to 59.

If the XLE can hit 59 it is quite possible the long term downtrend could be over.

The 55 area should act as support. Like the S & P 500, the XLE did break under the lower band on the daily chart, so it should retest the lower band at some point.

Apple:

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

Apple could only manage one close under 93.75, before reversing to the upside and closing back inside the lower band on the daily.

At this point, I would expect $100 to act as resistance.

Also, it will still need two closes under 93.75 to confirm a move lower.

Watch list:
Bullish Stocks: FRT, STZ, MCD, DLR, ATO, ED, FSLR, PNW

Bearish Stocks: TSLA, BWLD, ALXN, MNST, PII, BIDU, VRTX, SWK, GILD, LAD, HAR, TRIP, BABA, Q
Be sure to check earnings release dates.