July 21, 2015 - 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
7/20 - Short 7/24 - $20 Call @ $0.25
7/20 - Long 7/24 $19 Put @ $0.20

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Today's Working Orders

No working orders.

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You may have noticed that yesterday's high for the S & P 500 just happened to be 2,132.82.

If you are NOT a reader of this morning update, this may not have any particular significance to you.

But, considering I have made you aware of that EXACT price for the past three days, you may have paid patience to the market when it reached it and stalled right on the level.

In fact, just yesterday, I said this ...

"The next key level is 2,132.82.? If the S & P closes for two consecutive days above that level, the objective becomes 2,156."

The question for you is this.? Is this a place to get short?

And my answer to that is no.? But, it is a place to consider taking profits on long positions.

Why?? When a market takes out a key level, like the S & P did when it took out 2,125, a lot of times it will stall at the next confirming line, which happened to be 2,132.82.

Now, 2,125 should act as support. And 2,117.18 should also act as support.

And as I mentioned yesterday, the short term 60 minute chart for the S & P 500 is VERY close to moving into an uptrend.

Buying against one of the support lines after the S & P moves into a short term uptrend would be the scenario to be looking for.

Confirmation would be when the VIX fails and turns down.

Here are the key levels for the markets.

Stocks...
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VIX: ?

Major level - 15.63
Minor level - 14.84
Minor level - 13.28
Major level - 12.50
Minor level - 11.71

Just like the S & P yesterday, the low for the VIX just happened to be 11.71.? Then the VIX bounced, closing at 12.25,? just .25 under the key 12.50 level.

Watch where the VIX opens today.? If it opens higher, look for 13.28 to be resistance.

A lower open and 12.50 could act as resistance.

Of course, if the VIX get through 13.28, expect the market to head lower.

Remember, old support becomes resistance.

S & P 500 Cash Index: ?

Major level - 2,156.30
Minor level - 2,132.82
Major level - 2,125.00
Minor level - 2,117.18
Minor level - 2,101.62
Major level - 2,093.80

Bounce off the 2,132.82 level yesterday.? Look for support levels.

Watch for the 60 minute chart to move into an uptrend.

Nasd 100 (QQQ):? .

Major level - 115.63
Minor level - 113.28
Major level - 112.50
Minor level - 110.16
Major level - 109.38
Minor level - 107.03
Major level - 106.25

Friday, the QQQ closed at 113.59.? A close yesterday at 113.98 indicates the objective is now 115.63.

TLT: ?

Major level - 121.88
Minor level - 119.53
Major level - 118.75
Minor level - 117.96
Minor level - 116.41 *
Major level - 115.63
Minor level - 114.84 *

Objective of 118.75 was achieved Friday.? Next level is 119.53.

GLD:

Major level - 112.50
Minor level - 112.11
Major level - 110.94
Major level - 109.38
Minor level - 108.60
Major level - 106.25

Friday, the GLD closed at 108.65.? A close today under 109.38 and I would expect the GLD to drop to around $100 - $103.

Looks like this will happen.

As a general comment, this could be the flush out on the gold and the miners.? When you start to see down gaps with heavy selling volume it generally means the end is near.

The GLD is still about 5 - 8 above the downside objective.

Be patient and wait for it to come to you.

Didn't it seem like yesterday when people were saying gold was going to $10,000 per ounce?

XLE:

Major level -? 75
Minor level - 74.21
Minor level - 72.66
Major level - 71.88
Minor level - 71.09
Major level - 68.75

Yesterday was the first close under 71.88.? A close today under that level and you will start to see the massive selling like you see on gold.

Your patience will be rewarded.
Watch list:
Bullish Stocks:? REGN, AMZN, ILMN, ORLY, EW, DIS, PANW, GD, NKE, CELG, VRTX, CME, ACN, UA, FB, EA

Bearish Stocks: CMI, CLB, EOG, KLAC, QCOM, APA, GMCR, SNDK and QCOM