October 6, 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
..............................
Before I begin, I want to thank everyone for the positive feedback I received after yesterday's webinar.
It is always nice to hear!
Earnings season begins this Thursday with Alcoa reporting after the close.
I have to admit, the strength of this rally off the retest of the lower bands, has been stronger than I expected.
The question is this ... can this rally continue?
As I have pointed out, the daily chart had a bearish crossunder already.? At least for the S & P 500 and the DOW.? The NASD Composite is still clinging to a bullish bias, with the 200 ema just above the 253 day average.
However, it is very close to a bearish crossunder.
What this means is that I would fully expect resistance at around the midband.
The other scenario for the markets is that a double bottom is forming.? If that is the case, then when the intervening high at 2,020.86 is violated, buying should come into the market.
If you project the next top based on a double bottom, it works out to a high at around 2,170.
That is significant because the top band on the monthly charts is 2,152.
Basically, it would mean the markets are retesting that top band.
I know there will be a lot of gyrations back and forth to get there, but it is important to lay out the scenarios and anticipate those scenarios.
As the markets continue to trade, I will continue to update the various scenarios.
Here are the key levels for the markets.
Stocks...
?
VIX:?
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 came within 39 cents of the 18.75 objective yesterday.
20.31 and 23.44 should be resistance.
The key now is it if the VIX can close for two days under the 18.75 level.? If it can, I would expect the VIX to drop further and the markets to continue higher.
S & P 500 Cash Index:?
Major level - 2,000.00
Minor level - 1,976.62 *
Major level - 1,968.80
Minor level - 1,945.32 *
Major level - 1,937.50
Minor level - 1,929.68
A close above 1,976.62 today and the objective should be to 2,000.
Look for support at 1,968 and 1,945.
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
The QQQ closed just under the 106.25 level.
I would expect support at 105.46 and 103.91.
TLT:?
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 heading back to the 121.88 level.
If it cannot hold as support, I would expect 121.09 to.
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
Yesterday's high was exactly 109.38.
It it cannot get through that price, expect a move back to 106.
Two closes above 110.16 and the objective is 112.50.
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
Looking more and more like a major bottom is forming.
?
Yesterday, the XLE closed above 65.63, at 65.78.
Two closes above 66.41 and the objective is to 68.75.
If 68.75 gets hit on this drive. I would feel a bottom is in.
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.?
110.93 is the downside confirming level to 106.25 and that is where Apple stalled yesterday.
Target it to 112.50.? And resistance should be at 114.06.
Apple is in a downtrend on the daily chart.
Watch list:
Bullish Stocks:? ORLY, PNRA, NKE, LEA, DPS, EXR, MCD, VRSN, ATO, CBOE,? CVC, PGR
Bearish Stocks: R, FOSL, ADSK, RAX, ESPR, CUDA, GPS, LSTR
Be sure to check earnings release dates.