October 13, 2016 - MDT Pro Tips A.M.

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On The Mad Day Trader webinar yesterday, I mentioned that the key for the day was if the S & P 500 could hold the 2,140.62 line.? For the majority of the day, the market managed to bounce up and trade above that level.

In the last 10 minutes of trading going into the close, the S & P 500 sold off and closed at 2,139.18.

This sets up a scenario that the market should head lower and certainly retest the 2,125 level.

Pre-open, the market is down 14 points, which would mean an open right around the 2,125 level.

What conditions would you want to see to be a buyer at that level?

It happens that the lower band on the 30 minute chart is 2,125.59, which is within a whisper of the support line.

You want to see if the S & P 500 stays above the lower band.? If it breaks under the lower band, I would expect a bounce and a retest of the lower band at some point.

The other thing you want to see is the VIX sell off.

The VIX closed at 15.91 yesterday, just under the mid band on the daily chart, which is 16.40.

16.41 happens to be a minor support level, so you want to see the VIX fail and head down.

16.41 should be resistance on the VIX, so if it gets above that level, expect the VIX to head higher and the market to head lower.? The next resistance on the VIX is 17.19, so that is a level you want to watch if 16.41 is violated.

As for the S & P 500, if 2,125 does not hold, the next level of support would be 2,109.38.

Continue to monitor the levels for entry points.

Here are the key levels for the markets:

$VIX:

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
Minor level - 11.72

The VIX will need two closes above 16.41 to head up to 18.75.? If 16.41 is taken out, a quick move up to 18.75 is possible.

$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

2,125 should still be major support.? If the S & P 500 can hold at or above this level and the VIX reverses to the downside, expect a bounce.

Minor levels to watch are 2,132.80 and 2,117.20.

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

The QQQ closed at 117.42, just under the minor 117.97 level for the second day.? I would expect a retest of the 115.63 level.

I would not expect 114.84 to be exceeded. If it is, expect more selling pressure.

TLT:?

Major level - 140.63
Minor level - 139.85
Minor level - 138.28
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

The TLT closed at 132.96 yesterday. It will need to close above 132.03 to move up to 134.38.?? A close under 132.81 and expect the TLT to continue lower.

GLD:

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 has closed for two days over 119.53, so a bounce would be expected. The objective should be 121.88.

I would expect strong resistance at that level, with a move down to 112 possible.

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 has had two closes under 71.10, so a move back to 68.75 should be expected.

68.75 should offer strong support.

Short term charts are in uptrend formation, so another rally would be expected after finding support.

FXY:

Major level: 96.88
Major level: 96.09
Major level: 95.31
Major level: 94.53 *
Major level: 93.75 *
Major level
: 92.97
Major level: 92.19

The FXY dropped to 92.58.? At this point, a move down to around the 90.50 to 91.40 area would be expected. Resistance should be at 92.97.

AAPL:

Major levels for Apple are 118.75, 115.63, 112.50, 106.25, 100, 93.75, and 87.50.

Apple is trading just under the 118.75 level. Two closes under 117.97 and Apple should retest 115.63.? A pullback would create an opportunity to buy.

WATCH LIST:

Bullish Stocks: PCLN, AMZN, NTES, FLT, CXO, CMI, EW, ADBE, DE, LLY, JPM, CAB, ROST, LVS, CLR, AZPN, PTC, WGO

Bearish Stocks:? REGN, CI, DPS, VRTX, GILD, SRCL, CRM, NKE, UA, ALNY, VRX

Be sure to check earnings release dates.