October 10, 2014 - 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 Jim Parker, 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
No open positions.
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Today's Working Orders
BUY 4 EPZ4 @ 1876
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Stocks...
VIX...21.50 is the 200 Month mvg avg and the high of the volatility spikes over the past 20 months. This is the place to match up an interim low in the Spu's for a bounce.
Spu's....1900-02 is the 200 DMA. I would expect some reaction off the level.
1890 is where the resting pattern sell stops are from the August low.
I'm buying the Spu's for a bounce @ 1876. The entire zone from 1874-56 is a "do not sell weakness zone" for new shorts the first time down.
This will also be another 100 point move in the Spu, a place ripe for a bounce.
Expected price action...If this order is elected I'd initially look for a bounce to close to 1890 to sell some out (Pay for the trade). If it's a good low, expect a retest of the 200 DMA @ 1900.
If it's going to be a trad able low you should see the Spu's close over the 200 DMA within a couple of trading days.
Failure to achieve lift off above the 200 DMA will keep the bears firmly in control.
and the Spu's are going into the 1840's which will ostensibly wipe out most Fund yearly gains.
Which low is the final puke? Good question. Sometimes you're not 100% sure.
1912 is this weeks mvg avg closing hold level. We've held the breaks to it since the last week of December 2012. It's a big momentum level!!
The Bulls have a vested interest in defending this level. This is not a level to over trade.
We've already seen a 14 point bounce off the area last night only to return for a lower low.
IWM...can bounce off 103.87, however I doubt it bottoms until it trades closer to 98.55.
MVV...Midcap doesn't look much better. 60.92 is a mvg avg that has held since Dec. 2012 which matches up with the Spu's @ 1912. Closing below would be the start of a deeper risk off event.
LNG...buy LNG just above the 200 DMA @ 62.05. This seems a reasonable level to bottom fish for a bounce, however not holding this level leaves way for another 10 dollars lower on the longer time frame charts.
You can try it with a very tight stop, which in my world is no more than 2%.
DAX...ran the stops at the Aug low of 8903. The Aug low was good for a 1000 point rally.
Price action under 8900 opens the way to 8600.
X...closes below 33.40 open the gates for a move to 29.
OXY...92.50 is the 200 Week Mvg avg. This is support, however the qtrly shows there is room for a move to 89 and hold the longer term pattern.
Time to do your homework on names of interest.
CVX...200 Week Mvg Avg @111.91
COP...200 Week Mvg Avg @ 68.03
XOM...200 Week Mvg Avg @ 88.05
Some of you have been asking about the Oil names. Many are now lower on the year and could have deeper corrections pending Oil.
Traders can look for bounces at these levels.
Looking at annual charts of the Oil majors will give you a very different perspective.
A couple of closes below those level will lead to much lower targets.
Bonds ...
30 Yr. Bonds...142.15, then just shy of 144 is possible
TLT...120.60-70 is technical resistance. Closing above 121.20 starts a new ball game to the upside with a Risk Off Board.
FX...
AUD/USD...failed to garner buying above last years close of 89.19.
Commodities...
OIL..83.30 is first 1/3 Fib support on an 8 year retracement.
Brent...has already violated that swing Fib @93.30 and is heading toward a full 50% 8 yr. retrace @ 83.00
General Comments or Valuable Insight
Wednesday they royaly screwed the shorts. Yesterday it was the longs.
Any buying has to be done at specific levels with extremely tight stops.
I.E. 3-4 points in the Spu's to make 25-30 handles minimum.
Mainstream media is trying to get you to buy.
Before you do check the charts.
Start with a daily...the 200 DMA is always a good barometer...again expand your time frames out to a qtrly chart.
Go through the progression of time frames.Longer term charts can look very different.
Trade the chart in front of you. There are a lot of moving parts right now.
Any running of weekly or longer term stops can cause the directional trader severe indigestion.
Bots do nothing but sniff out these levels to clean out resting orders.
Keep in mind it's a "Lemming Effect Time Frame Trade." The level has to be really juicy to get the lemmings to jump off a cliff and form up for another run in the opposite direction.
VIX
S&P 500 Weekly
S&P 500 Monthly
NASD 100 Weekly
OXY Qtrly
OXY Weekly
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For Glossary of terms and abbreviations click here.