May 18, 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.

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The big event today is the release of the FOMC meeting minutes at 2:00.? I suspect the market will be slow until that time.

Yesterday, the markets were anything but slow, with the S & P 500 giving back most of the gains from Monday.

I did mention that the markets should be choppy based on the short term charts being in downtrend formations.

The good news is that the S & P did not close back under 2,046.88.? In the last half hour, the S & P 500 was trading under 2,041 and recouped in that time to close above the downside confirming level.

2,046.88 is a key level to watch if you are trading intra day.? The other key level is the 15.63 level on the VIX.? The last print I had last night showed the VIX closing at 15.62.? This morning, the same data feed has it closing at 15.65.

And another data feed I use, has it closing at 15.57.

You may think that is not particularly material, but based on what I share, it is.

One reason is that the VIX has had trouble closing above 15.63 and it has been serious resistance.

Regardless of the actual closing price, be aware that 15.63 should be a level in the VIX to watch closing.

If price is repelled at that level, look for the markets to head higher.? If the VIX gets
through it, then expect more of a sell off.

Here are the key levels for the markets.

VIX:

Major level – 25.00
Minor level – 23.44
Minor level – 20.31
Major level – 18.75
Minor level – 17.19 *
Minor level – 15.63 *
Minor level – 14.06 *
Major level – 12.50

The 15.63 level should be key today.

Minor support should be at 14.06 and 16.41 should be minor resistance.

S & P 500 Cash Index:?

Major level – 2,125.00
Minor level – 2,109.38
Minor level – 2,078.12
Major level – 2,062.50 *
Minor level – 2,046.88 *
Minor level – 2,015.62
Major level – 2,000.00

As I have been saying, the 2,046.88 level is a key level at the moment.? If the market closes under that level for two days, you can expect a move down to 2,000.

Also, the market has been bouncing off the major 2,062.50 level, which it will have to clear to move higher.

2,078.12 is the next minor level to the upside.

Nasd 100 (QQQ):?

Major level – 112.50
Minor level – 111.71
Minor level – 110.16
Major level – 109.38
Minor level – 108.60
Minor level – 107.03 *
Major level – 106.25
Minor level – 105.46 *
Minor level – 103.91
Major level – 103.13

105.86 is a minor support level for the QQQ and it closed under it yesterday.

A close today under that level and the QQQ should drop to 104.70.

TLT:?

Major level – 132.81
Minor level – 132.42
Minor level – 132.03
Major level – 131.25 *
Minor level – 130.46
Minor level – 128.91 *
Major level – 128.13

The TLT bounced back and closed above 131.25 yesterday.?

If it can clear 132.81, it paves the way for a move up to the 138 area.

130.46 should be support for the TLT.? Also, the TLT has struggled to close above 132.03 for two days.

GLD:

Major level – 125.00
Minor level – 124.22
Minor level – 122.66
Major level – 121.88
Minor level – 121.10 *
Minor level – 119.53
Major level – 118.75
Minor level – 117.96

The GLD will need two closes above 122.66 to move higher.

Minor support should be at 120.31 and 118.75.

XLE:

Minor level – 69.53
Major level – 68.75
Minor level – 67.96
Minor level – 66.41 *
Major level – 65.63 *
Minor level – 64.84
Minor level – 63.28
Major level – 62.50

Two closes above 66.41 and the XLE should try and make a run at 68. And yesterday it closed at 66.40, just one penny under that level.

The XLE continues to move closer to an uptrend on the daily chart.

65.63 should be support.? 66.02 should be minor support.

Apple:

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

To move higher, Apple will need two closes above 95.31.? 90.63 should be support now. Tempted to suggest a non directional trade on Apple at this point.

It has moved into downtrends on it’s shorter term charts.

Watch list:
Bullish Stocks: AMZN, LMT, BCR, STZ, CLX, FB, NEE, RTN, ZBH, DPS, XOM
?
Bearish Stocks: REGN, HUM, AMGN, ALXN, ANTM, PANW, AET, CSL, CELG,
?
Be sure to check earnings release dates.