October 12, 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
Premium collected – $1.25

NCR Long Jan 15 $27 Call
NCR Short Jan 15 $32 Call
Net Debit – $0.60

X Long at $14
Short September 25th $14 Call @ $.54

ASNA Long at $14.20
Premium collected – $.30

Before I begin today’s update, I want to mention two things.

The first is that one of the metrics I track are the corporate buybacks.? Companies that are buying back their own shares can be great stocks to put on a watch list because as they reduce their outstanding shares, in theory, their earnings per share should rise.

If you feel that having this list monthly could be helpful to you, please email at davismdt@gmail.com and let me know.

If there is enough interest, I will add a PDF to the members area every month.

The second thing I want to mention is that this Wednesday will be our webinar.? If there is anything you would like me to discuss, please email me at the above address and I will try to incorporate it into the webinar.

All markets had strong bullish bars on their weekly charts. Both the S & P 500 and the DOW moved up over 3% last week.? The NASD Composite was the laggard, moving up only 2.61% for the week.

However, Friday’s daily price bar for all markets were doji bars.? A doji is usually a narrow range bar where the close is approximately the open.

A doji means indecision. It can also mean a pause before the move continues.

I would not be surprised if the markets pulled back slightly early in the week, before they head up.

Based on Friday’s close, the objective for the S & P 500 should be 2,031.

Here are the key levels for the markets.


Minor level – 29.68
Minor level – 26.56
Major level – 25.00
Minor level – 23.44
Minor level – 20.31 *
Major level – 18.75
Minor level – 17.18 *
Major level – 12.50

The VIX dropped 18.43% last week.
Friday was the third day it closed under the 18.75 level.

And the first close under 17.18.? A close today under 17.18 and the objective is back to 12.50.

I would expect 25 to be resistance.

S & P 500 Cash Index:?

Major level – 2,062.50
Minor level – 2,039.12 *
Major level – 2,031.30
Minor level – 2,007.82 *
Major level – 2,000.00
Minor level – 1,976.62
Major level – 1,968.80

As I mentioned already, the S & P 500 did close above 2,007.82 on Friday.? The objective should now be 2,031.30.

Look for support at the lower levels.

Nasd 100 (QQQ):?

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

The QQQ closed above the 106.25 level on Friday.

Two closes above 107.03 and the target is 109.38.
Lower levels should act as support.


Major level – 128.13
Minor level – 125.78
Major level – 125
Minor level – 124.22
Minor level – 122.66 *
Major level – 121.88
Minor level – 121.09
Minor level – 119.53
Major level – 118.75

The TLT is sitting right on the 121.88 support level.
Two closes under 121.09 and the objective should be to 118.75.

It would need to close above 122.66 to move up to 125.


Minor level – 113.28
Major level – 112.50
Minor level – 110.16
Major level – 109.38 *
Minor level – 108.60
Minor level – 107.03
Major level – 106.25

A close today above 110.16 and the objective is to 112.50.

A close above 112.50 would be bullish.? Still in a trading range.


Major level – 71.88
Minor level – 69.53 *
Major level – 68.75
Minor level – 66.41
Major level – 65.63
Minor level – 64.84
Minor level – 63.28
Major level – 62.50

The XLE has had two closes above 69.53, so the objective should be to 71.88.

Look for lower levels to act as support.


Major levels for Apple are 118.75, 112.50, 106.25, 100, 93.75 and 87.50.
100 should be a major support level for Apple.?

Apple popped up and is just under the 112.50 level.? Two closes above 114.60 and Apple should go up to 118.75.

Apple remains in a downtrend on the daily chart.

Watch list:


Be sure to check earnings release dates.