October 7, 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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It looks like earnings season is beginning with a strong move. Actually, it does not begin until tomorrow, but YUM reported and is down over 15% pre open.

I fully expect we will see moves of this magnitude and greater this earnings season.

As the season progresses, I will share some strategies on trading after an earnings release.? These set ups are greatly enhanced if a company reports on a Thursday afternoon and they have weekly options.

The markets paused yesterday.? After a 100 point rally in the S & P in only 5 days, you would expect a pause.

This morning, the futures are trading to the upside, so I would expect the upside objectives to be hit.

The oil market continues to move up.? The bottom came one penny above the support line.

I would like to see a move up to the 68.75 line to confirm a major long term bottom is in.

The XLE is 1.51 away from the price line.

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

Yesterday's low was 18.82 or 7 cents above the 18.75 support line.

I would expect that 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

The S & P did close above 1,976.62 yesterday, so the objective should be to 2,000.

Look for support at 1,976.62 and 1,968.

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 objective should be to 106.25.

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 hit a low of 122.41 yesterday, before reversing to the upside.

The was just under the minor support level of 122.66.
If this level holds today, I would expect a move back up to 125.

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 popped up and closed above the 109.38 level, at 109.86.

108.60 should be support.

Two closes above 110.16 and the objective should be to 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

A close today above 66.41 and the objective should be to 68.75.

Confirmation of a major bottom is very close.
?
65.63 should be support.

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.?

Apple closed yesterday at 111.31.? Watch how Apple trades around the 112.50 level.? A clean break above it, and it should head higher.

If it stalls at 112.50, expect a move lower.

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: LSTR, R, FOSL, ADSK, RAX, ESPR, CUDA, GPS

Be sure to check earnings release dates.