January 5, 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
Short Jan 8th-$21 Call - $.40

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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2016 begins with a massive almost 49 point day in the S & P 500.

I suspect the only good news was that the market managed to rally back and close at the 47% level of the daily bar.

This only signifies that the extreme volatility the market saw last year will continue this year.

The markets are oversold and I would expect a bounce.

Having said that, all major markets traded under their extreme bollinger bands on the 60 minute chart yesterday.
This tells me to expect price to retest those levels after we do get a bounce.

For the S & P 500, the lower band is 1,993.61

Here are the key levels for the markets.
?
VIX:?

Major level - 25.00
Minor level - 23.44
Minor level - 20.31
Major level - 18.85
Minor level - 17.19
Minor level - 14.06
Major level - 12.50

The VIX hit a high of 23.36 yesterday, before pulling back.
It would need two closes above 23.44 to move up to 25.

I would expect the 25 level to be strong resistance.

Another point of note is that the VIX stopped at the upper band on the 60 minute chart yesterday.? That price level is 23.73.

I would expect a retest of that level and if the VIX fails and heads down, look for the markets to bounce.

S & P 500 Cash Index:?

Minor level - 2,054.68
Minor level - 2,039.10
Major level - 2,031.30
Minor level - 2,023.48
Minor level - 2,007.82
Major level - 2,000.00
Minor level - 1,992.18
Minor level - 1,976.52
Major level - 1,968.70

The markets bounced yesterday just under the minor 1,992.18 support level.

If this level can hold today and the VIX reverses to the downside, I would expect a move back up.

1,968 is the outer level I would not expect the S & P to break under on the first attempt.? In other words, that should be the outer limits of a drop.

Nasd 100 (QQQ):?

Major level - 115.63
Minor level - 114.85
Minor level - 113.28
Major level - 112.50
Minor level - 111.72
Minor level - 110.16
Major level - 109.38
Minor level - 108.60
Minor level - 107.03
Major level - 106.25

The QQQ did hold support just above the 109.38 support level I mentioned yesterday.? The low was 109.90.

However, a close today under 111.72 and the objective is to 109.38.

TLT:?

Major level - 125
Minor level - 124.22
Minor level - 122.66
Major level - 121.88
Minor level - 121.09
Minor level - 119.53
Major level - 118.75
Minor level - 117.97
Minor level - 116.40
Major level - 115.62

The TLT did hit the 121.88 level yesterday, but could not close above it.?

It would need two closes under 121.09 to drop to 118.75.

If the TLT can close for two days above 122.66, it should move up to 125.

GLD:

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
Major level - 96.88

103.13 should be the objective for the GLD, however it has been struggling to close above that level.

Short term the trend is bullish and I would like to see two closes above 103.13 before any meaningful move happens in the GLD.

XLE:

Minor level - 63.28
Major level - 62.50
Minor level - 61.72
Minor level - 60.16
Major level - 59.38 *
Minor level - 58.60
Minor level - 57.03
Major level - 56.25

The XLE did manage to reverse and close above 60.16 yesterday, so I would expect the objective to be back to 62.50.

Also, the Oil Vix and the XLE seem to be diverging, because the Oil Vix was up almost 7% yesterday.
And the XLE was off slightly.

Apple:

Major levels for Apple are 125, 118.75, 112.50, 106.25, 100, and 93.75.
106 should be a major support level for Apple.?

Apple hit a low yesterday of $102 and reversed to close at $105.35.
It stopped at the lower band on the 60 minute chart before reversing back to the upside.

If it can test the lower band on the daily chart, which is 99.92, it would be setting up for a buying opportunity.

Watch list:
Bullish Stocks: ANET, BXLT, FXCM, HIMX

Bearish Stocks: CMG, CXO, SLB, AAPL, ZBRA, CFR, WSM, KEX, JWN, RY, MGA, KORS, RH

Be sure to check earnings release dates