October 2, 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 $29 Call
Net Debit - $0.70
X Long at $14
Short September 25th $14 Call @ $.54
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The Non Farm Payroll came out this morning and the market, which had been to the upside, has now sold off.
As I said yesterday, my concern was that the VIX had confirmed a move to the upside, so this does not shock me.
The question is how do you make money off this?
Typically, I would consider a straddle or a strangle on one of the indexes, but with option pricing being juiced up, I would not do that trade.
Actually, that is one of the problems at the moment.
As an example, I was looking at some puts yesterday on TSLA.? The put that was $5 out of the money with one day to expiration was quoted at $5.
That means you need a move of $10 just to break even.
I don't like those odds.
That is the problem at the moment with option pricing. That and the fact that bid ask spreads have widened.
The webinar has been rescheduled to Monday at 12:00 EST. I hope to see you on the webinar.
Here are the key levels for the markets.
Stocks...
?
VIX:?
Minor level - 32.81
Major level - 31.25
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
The VIX confirmed the move up to 31.25.?
23.44 is the downside confirming level and yesterday the VIX closed at 22.55.?
S & P 500 Cash Index:?
Minor level - 1,945.32
Major level - 1,937.50
Minor level - 1,929.68
Minor level - 1,914.12 *
Major level - 1,906.30
Minor level - 1,898.48
Major level - 1,875.00
The S & P 500 did close above 1,914.12 yesterday, so the objective should be to 1,937.50.
Look for support at 1,875 and 1,898.
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
Minor level - 102.35
Minor level - 101.78 *
Major level - 100.00
Minor level - 99.21
Major level - 96.88
Major level - 93.75
The objective for the QQQ should be 103.13.
I would expect support at the 100 level.
TLT:?
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
Minor level - 117.96
Major level - 115.63
The TLT should hit the 125 level today.
Look for lower levels to act as support.
GLD:
Major level - 112.50
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
The GLD should also get a pop today.
109.38 should be the objective.
XLE:
Major level - 68.75
Minor level - 66.41
Major level - 65.63
Minor level - 64.84
Minor level - 63.28
Major level - 62.50
Minor level - 61.72
Minor level - 60.16 *
Major level - 59.38
The XLE did take out the 62.50 level.? Look for the XLE to bounce between 62.50 and and 59.38.
Apple:
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.?
I would expect a test of 106.25.? Look for 110.93 to be resistance.
Momentum has shifted to the downside on Apple.
Watch list:
Bullish Stocks:? PNRA, NKE, RAI, MCD, HRL, ATO,? WX, NVDA, EZCH, G
Bearish Stocks: AMGN, JAZZ, PVH, BDX, BIDU, ALNY, TIF, MON, CAT, DE, ESL, VFC, CAT, PVH
Be sure to check earnings release dates.
