January 25, 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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After spending much of the weekend digging out from over two feet of snow, it is good to see that the markets will not be affected from the storm.

Saturday all bridges and tunnels into New York were closed, so I can only imagine what would have happened if the storm hit today.

Last week we had the bounce I was anticipating. The reversal came at approximately 12:30 EST on Wednesday.

The low was 1,812.29. You may recall that there is a major line of support at 1,812.50.

Last week's weekly price bar ended up with a hammer. A hammer bar is a reversal bar.

I also want to point out the the 200 ema on the weekly chart for the S & P 500 is 1,812.82.

In effect, there were two strong levels of support right at last week's low. The support level and the 200 ema.

The other market I mentioned due for a bounce was oil and the XLE. And I mentioned that 50 should be a strong level of support.

Last week's low was 49.93 before the XLE reversed and headed higher.

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 - 18.85
Minor level - 17.19

The VIX closed at 22.34 Friday. A close today under 23.44 and it should drop back to 18.75.

Higher levels should act as resistance.

S & P 500 Cash Index:

Major level - 2,000.00
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
Minor level - 1,796.88
Minor level - 1,765.62

Lower levels should act as support.
The S & P 500 finally closed above the lower band on the daily chart.

A close today above 1,890.62 and it should test 1,937.50.

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 QQQ did hit the 103.13 objective on Friday.
Two closes above 103.91 and the objective becomes 106.25.

Support should be at 102.35.

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 did hold Friday just above the 125 support level.
It will need two closes under 124.22 to test 121.88.

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 is still not gaining any traction and continues to trade between the 106.25 and 103 levels.

The only good thing about this is the longer it stays within this range, the bigger the breakout when it does finally start to move.

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

Same conditions as Friday. A move up to the 59 area would indicate that a major bottom could be forming.

A failure under that level and expect a move back to the 50 to 53 area.

Apple:

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

Apple had a nice bounce Friday from an extremely oversold condition.

It closed above the lower band and was up just over 5%.

But I did say this Friday ...

"Very oversold. A buy on a close above 97.60 could produce a fast pop."

Two closes above 101.56 and it should move up to 106.

Watch list:
Bullish Stocks: ISRG, ED, WCN, BXLT, T

Bearish Stocks: LNKD, IBM, 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.