July 22, 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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Since stalling at the 2,132.82 level on Monday, the S & P 500 has pulled back.

The question now is where should support be? ?And what can the VIX tell us to help us determine where the market should turn?

As I said yesterday, I do not usually advocate shorting against the resistance levels. ?But there are some exceptions. ?The first is if you follow the markets during the day and the second is if you are experienced.

I say this because the overall market trend for the S & P 500 is still bullish, so to me a short at 2,132.82 would still be considered a counter-trend trade.

So, if you do want to trade the counter-trend move, you need to recognize that it is just that. ?

I would also suggest you cut your position size when trading against the main trend.

Here are the key levels for the markets.

Stocks...
?
VIX: ?

Major level - 15.63
Minor level - 14.84
Minor level - 14.06
Minor level - 13.28 - 2 closes above & objective is 15.63
Major level - 12.50
Minor level - 11.71-2 closes under & objective is 9.38

Watch where the VIX opens today. ?If it opens higher, look for 13.28 to be resistance and then 14.06.

Support is at 11.71, which was Monday's low in the VIX.

The VIX is bouncing around the key 12.50 level again.

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 - 2,109.40
Minor level - 2,101.62?
Major level - 2,093.80

The 60 minute chart has moved into an uptrend, so I am biased to buying support levels.

You want to see the VIX reverse to the downside and the S & P 500 hold support at one the levels as a clue to initiate long positions.

Nasd 100 (QQQ): ?.

Major level - 115.63
Minor level - 113.28
Major level - 112.50
Minor level - 110.16
Major level - 109.38 - Should be support.
Minor level - 107.03
Major level - 106.25

115.63 is still the active objective. ?Apple is down pre market off earnings, which should affect the QQQ.

The 60 minute chart has moved into an uptrend, but it is overbought. ?We know this because it is sitting right at the top extreme bollinger band.

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 *

TLT back to above the 118.75 level. ?The TLT would need two closes above 119.53 in order to move up to 121.88.

GLD:?

Major level - 112.50
Major level - 109.38
Minor level - 107.03
Major level - 106.25
Minor level - 105.46

I do feel the GLD will head lower still. ?Most likely to around the 100 - 103 level.

A close today under 105.46 and the objective is 103.13.

As I said yesterday, be patient and wait until the final flush out before initiating longs.

XLE:?

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

The XLE has now had two closes the 71.88 level. ?You want to be selling rallies, with an expectation that the XLE could drop to around 60.

Just like the GLD, be patient and wait for the flush out.

Watch list:
Bullish Stocks: ?REGN, AMZN, ILMN, ORLY, EW, DIS, PANW, GD, NKE, CELG, VRTX, CME, ACN, UA, FB, EA

Bearish Stocks: CMI, CLB, VMW, SLB, Z, APA, GMCR, SNDK and QCOM