November 4, 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.
Yesterday marked the 8th consecutive lower close for the S & P 500. This definitely qualifies the market as oversold. Having said that, there has not been any evidence of a selling climax during this pullback.
This indicates to me that perhaps the depth of this pullback may be a bit more than most expect.
The downside objective should be the 2,062 level.? And at this point, the S & P 500 is trading just above the mid band on the daily chart, which is 2,071.? As you know, this can often act as a support level as price approaches from above.
This morning we will get the Non Farm Payroll at 8:30 am EST.? Perhaps this can help to turn the markets in the short term.? Certainly, the Fed announcement on Wednesday did nothing to stem the sell off.
And earnings have not been strong enough to help investors step into the markets. Even the market leader, Facebook, sold off citing a future slow down in revenue growth.
It seems that all eyes are on the Presidential election next week.? The VIX has spiked up to the highest level since the Brexit vote.
The VIX closed out at 22.08 yesterday and appears ready to run to 25.? The upper band on the daily chart is 26.33 and a level that I would expect a turn to take place.
Trading carefully is the action to follow.
Continue to monitor the levels for entry points.
Here are the Key Levels for the Markets:
$VIX:
Major level - 25.00
Minor level ? 24.22
Minor level ? 22.66
Major level ? 21.88
Minor level ? 21.10
Minor level ? 19.53 *
Major level - 18.75 *
Minor level - 17.96
Minor level - 16.41
Major level - 15.63
Minor level - 14.85
Minor level - 13.28
Major level - 12.50
The VIX already hit the 21.88 target, closing at 22.08. The next minor level is 22.66.? Two closes above 22.66 and the objective is 25.? The outside level the VIX should move to is 28.13.
Short term support should be at 20.31.
$SPX:
Major level - 2,250.00
Minor level - 2,234.38
Minor level - 2,203.12
Major level - 2,187.50
Minor level - 2,171.88
Minor level - 2,140.62 *
Major level - 2,125.00 *
Minor level - 2,109.38
Minor level - 2,078.12
Major level - 2,062.50
2,062.50 has now become the active objective.? 2,109 should be minor resistance at this point. ?Also, 2,093.80 should be resistance.
On the downside, 2,078 should offer minor support.
QQQ:?
Major level - 121.88
Minor level - 121.10
Minor level - 119.53
Major level - 118.75
Minor level - 117.97
Minor level - 116.41
Major level - 115.63
Minor level - 114.84 *
Minor level - 113.28
Major level - 112.50
A close today under 114.84 and the QQQ should drop to 112.50.
114.84 should offer minor resistance, as well as the 115.63 level.
TLT:?
Major level - 137.50
Minor level - 136.72
Minor level - 135.16
Major level - 134.38
Minor level - 133.60
Minor level - 132.03 *
Major level - 131.25 *
Minor level ? 130.46 *
Minor level ? 128.91
Major level ? 128.13
The TLT will need two closes below 130.46 and the TLT should drop to 128.? 130.86 should be minor resistance.? 130.08 could be minor support.
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 ? 117.97
The GLD is flirting with the 125 level.? I do not expect 125 to offer resistance.? Minor resistance is at 124.61 and minor support is at 123.83.
XLE:
Major level - 75.00
Minor level - 74.22
Minor level - 72.66
Major level - 71.88
Minor level - 71.10
Minor level - 69.53
Major level - 68.75 *
Minor level - 67.96 *
Minor level - 66.41
Major level - 65.63
The XLE would need two closes under 67.96 to move back to 65.63. ?It has closed for two days just above that level.? So, this should be the level to watch.
67.58 should be minor support. ?And 69.53 should offer resistance.
FXY:
Major level: 96.88
Minor level: 96.49
Minor level: 95.70
Major level: 95.31
Minor level: 94.92
Minor level: 94.14
Major level: 93.75 *
Minor level: 93.36
Minor level: 92.58 *
Major level: 92.19
Minor level: 91.80
Minor level: 91.02
Major level: 90.63
The FXY took out the 93.75 level, hitting a high of 93.80.? If the FXY can clear 93.75, look for a move up to 97.? 93.55 should be minor support.
AAPL:
Major levels for Apple are 118.75, 115.63, 112.50, 106.25, 100, 93.75, and 87.50.
A close today under 110.93 and it should confirm a move down to 106.25. Look for that level to offer resistance.
WATCH LIST:
Bullish Stocks: NOC, GS, BA, MA, NVDA, AKAM, QCOM, MSFT,
Bearish Stocks:? CMG, REGN, AGN, CI, KMB, VRTX, ESRX, RARE
Be sure to check earnings release dates
