January 19, 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
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If the markets ever needed a day off, I suspect it could not have come at a better time than yesterday.

Perhaps the long weekend has allowed data to be digested and allowed time for investors to regroup.

As I have been saying, the markets are oversold and have been for five days now.

In addition, there have been two selling climaxes now in this downmove.? The first was last Wednesday when the down to up volume was 9.41.? And Friday it hit 8.81. Not quite the 9 to 1 level I like to see, but close.

Pre open, the S & P 500 is trading to the upside almost 26 points, so if the markets can close to the upside, we should see a multiple day rally.

The lower band on the daily chart is 1,903.96.? If the S & P 500 can get above that and close above it today, it would be bullish.

After the close today, we get earnings from IBM and NFLX.
And tomorrow before the open is Goldman Sachs.

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 broke above the upper band on the daily chart and ended the day closing under that level.
If closed at 27.02 on Friday and the upper band is 28.49.

For the markets to head up, the VIX would have to move under 26.56 today.? That is because if it closed above that level, it would most likely try and test 31.25.

S & P 500 Cash Index:?

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
Minor level – 1,898.48
Minor level – 1,882.82
Major level – 1,875.00

The S & P 500 dropped under the 1,875 major support level on Friday, to close back above it.

1,875 should be major support.? The S & P will need two closes above 1,882.82 to move up to 1,906.

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 100 level did hold for the QQQ on Friday.
A close today above 102.35 and the QQQ should move up to 103.13.

This is the strongest of all major markets.

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 closed above 125 on Friday, at 125.75.
Lower levels should still act as support.

The TLT would need two closes above 125.78 to move up to the next level, which is 128.

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

A close today above 103.91 and the GLD should move back up to 106.25.

103 should act as support.

XLE:

Major level – 59.38
Minor level – 58.60
Minor level – 57.03
Major level – 56.25
Minor level – 55.46
Minor level – 53.91
Major level – 53.13 **
Major level – 50.00
Minor level – 48.43

53.13 is a major support level for the XLE.
If this level can hold, it could have a sharp move up.

If it cannot hold, I would expect a move down to 50.

Apple:

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

Apple is back under the lower band on the daily chart.
A bounce here would be expected.? The lower band is 98.02.

Watch list:
Bullish Stocks: AWK, O, BXLT, LEI

Bearish Stocks: ADS, BA, WHR GS, GD, FLT, UHS, CELG, CP, RL, FFIV, GRA, HAR, AGU, CXO, UNP, XOM, SWKS

Be sure to check earnings release dates.