January 20, 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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It appears that the day off for the markets will not help to stem to tide of this sell off.

As I write this before the open, the S & P 500 is set up open to the downside around 30 points.

I have to admit, I have expected a bounce here because of how oversold all the markets are.? A bounce would give us an opportunity to get short.? However, we are just not getting it at the moment.? We will.?

Perhaps today we will get a major selling climax.? That would help to confirm a bounce is coming.

But the fact of the matter is that this market action shows you that the market is always right.? Everyone is expecting a bounce which is just not happening.

On our last webinar, I outlined some levels where I feel this market can go.? If you were not on the webinar, you may want to listen to it and download the PowerPoint.

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 closed at 26.05 yesterday, just under the 26.56 level.

It would still need two closes above 26.56 to move up to 31.25.

The 29 area should be resistance as this is the upper band on the daily and 60 minute chart.

S & P 500 Cash Index:?

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
Minor level - 1,867.18
Minor level - 1,851.62
Major level - 1,843.80
Minor level - 1,835.98

Based on an open around 30 points lower, the S & P would open just above the 1,843.80 support level.

If that level cannot hold, look for 1,836 area to act as support.

1,812.50 is the outer range of where this sell off should stop.? This is a level I would NOT expect to be taken out on the first attempt.

The flip side of this is it has very BEARISH implications if it is exceeded on the first attempt.

Still trading under the lower band on the daily.

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

100 should be taken out on the open.? Look for it to act as resistance.

As I said the other day, a move down to the 90 area may not be out of the question.

This would be confirmed if the QQQ closed two days under 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 remained above the 125 level yesterday.

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

Objective should be to 106.25.

103 should act as support.
The metal is diverging from the minors.
Expect them to catch up on a rise in price.

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

Objective should be to 50.? Oil remains in free fall.

Apple:

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

Still under the bottom band on the daily.?? Sell all rallies at this point.? 100 should be resistance.

Two closes under 93.75 and it will confirm my suggestion that Apple will drop to 75.

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

Bearish Stocks: ADS, BA, WHR GS, GD, FLT, UHS, CELG, CP, RL, FFIV, GRA, HAR, AGU, CXO, UNP, XOM, SWKS
IBM and too many to mention

Be sure to check earnings release dates.