January 7, 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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I mentioned yesterday that the only thing the markets have not seen this year as of yet is a flash crash.

Perhaps you will see one.

Pre open, the S & P 500 is down close to 40 points and the DOW is down almost 400 points.

This is based on another massive sell off in China and around the world.

The real issue is that the markets have not had a selling climax during this sell off.

Perhaps today we get one.

Based on where the S & P is trading pre open, it will be below the 1,968.80 level. Two closes under this price and the S & P could drop to 1,875.

Please don't say you have not been warned.

If this volatility is not enough for you, expect more tomorrow with the release of the Non Farm Payroll at 8:30 EST.

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

I will repeat what I write yesterday ... watch where the VIX opens.? Resistance should be at 25.? If the VIX takes out 25, the markets will continue down.

S & P 500 Cash Index:?

Major level - 2,000.00
Minor level - 1,992.18
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

A close today under 1,992.18? and the S & P 500 should drop to 1,968.80.

1,969 level is key.? Two closes under this level and the S & P will want to drop to 1,875 or 1,900.

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

109.38 should be resistance. Major support at the 100 level.? For the short term, a close today under 108.60 and the objective is 106.25, which most likely will be hit at the open.

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

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

Looks like the TLT will get above the 122.66 level this morning.

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

The GLD finally had two closes above the 103 level.

Next level up is 103.91.? Two closes above that level and the GLD should move up to 106.25.
A close today above 103.91 and the objective is 106.

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 continues in free fall.

Watch the 56.25 level.? If this price is taken out, EXPECT lower prices to follow. But, it should be strong support.

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 set y to take out the 100 level, which is also the bottom band on the daily chart.? Based on this, expect another round of selling after a minor rally.

Watch list:
Bullish Stocks: None

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

Be sure to check earnings release dates.