January 14, 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
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 - $1.05
Short Jan 8th-$13.75 Call
P Long $13.38
Short Jan $14 Call - $.35
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After looking like we might get the bounce from an oversold condition yesterday, the markets turned and headed down.
The S & P 500 hit a high of 1,950.33 and proceeded to sell off and close at 1,890.28.? This is just 15 points above the ultimate objective, which is 1,875.
And the S & P 500 broke under the lower bollinger band on the daily chart.? This tells us to expect another move back down to the lower bands after the next rally.
The weakness in the markets seems to be spreading to every sector.? It is not just confined to the oil sector.
The only bullish scenario at the moment is that we finally had a selling climax.? Yesterday the down to up volume hit 9.41.
A rally should be forthcoming.
To give you an idea of how weak and oversold this market is, there were almost 700 stocks trading under their extreme bollinger bands on the 60 minute charts.
And the number of downtrending stocks far outweigh the number of uptrending stocks.
Here are the key levels for the markets.
?
VIX:?
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 - 18.85
Minor level - 17.19
The VIX stopped at 21.48, or just over a point above the support level of 20.31 and closed above 25.
It will need two closes above 26.56 to head higher.
However, 27 is the upper band on the 60 minute chart, which should act as resistance.
S & P 500 Cash Index:?
Minor level - 1,976.52
Major level - 1,968.80
Minor level - 1,960.88
Minor level - 1,945.33
Major level - 1,937.50
Minor level - 1,929.68
Minor level - 1,914.13
Major level - 1,906.30
The S & P 500 almost hit the major 1,875 support line yesterday.? This should be a major level of support.
If the VIX fails and starts to head down, look for the markets to bounce from these levels.
It may take a few days to consolidate before a rally ensues.
Nasd 100 (QQQ):?
Major level - 106.25
Minor level - 105.47
Minor level - 103.91
Major level - 103.13
Major level - 100.00
Minor level - 99.21
Minor level - 97.66
Major level - 96.88
The 105.47 level did not hold any support.? The QQQ sold off and closed at 101.90
It would need two closed under 99.21 to move down to 96.88.
TLT:?
Major level - 128.13
Minor level - 127.34
Minor level - 125.78 *
Major level - 125.00
Minor level - 124.22
Minor level - 122.66
Major level - 121.88
Minor level - 121.09
The TLT hit the 125 objective, with a high of 125.50 yesterday.
At this point, 124.22 should be support.
To move higher, the TLT will need two closes above 125.78.
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
The GLD reversed and closed at 104.72.? If it holds above 103.91, look for a move back up to 106.25.
XLE:
Major level - 59.38
Minor level - 58.60
Minor level - 57.03
Major level - 56.25
Minor level - 54.68 *
Minor level - 51.56
Major level - 50.00
A close today under 54.68 and the XLE should hit 50.
Still trying to hold the lower band on the daily chart.
If it takes out the lower band, this will tell us what to expect down the road.
Apple:
Major levels for Apple are 112.50, 106.25, 100, 93.75,
and 87.50.
Apple reversed yesterday and closed under the lower band.
This tells us the pain is not over.
Watch list:
Bullish Stocks: DLR
Bearish Stocks: MMM, BA, WHR GS, GD, FLT, UHS, CP, RL, FFIV, GRA, HAR, AGU, CXO, UNP, XOM, SWKS
Be sure to check earnings release dates.
