September 29, 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 sell off continued yesterday with a massive 50 point drop in the S & P 500.

I can't help but wonder if this move was exacerbated by the blood moon on Sunday night.

Before you dismiss me as a quack, let me say that? there have been studies on the affects of lunar activity on the markets.

And they have been shown to create excess volatility.

After yesterday, I may take a harder look at the phenomenon.

As I said yesterday, the markets and the VIX are right up against key support and resistance levels.

They are are all (with the exception of the NASD market) testing their extreme bollinger bands.

The VIX moved up as I expected and hit a high of 28.33, which breached the top band on the daily chart.

However, it closed at 27.63 or .15 under the top band.

The key now will be to see if this level can hold as resistance.

The S & P 500 actually took out the lower band, which is not a good sign.

And it closed about 6 points above the key 1,875 support level.

The key for the markets now will be to see if the VIX can reverse off the top band and the S & P 500 finds support at the 1,875 level.

The only positive scenario for the markets was that yesterday qualified as a selling climax.

The down to up volume registered 21.48, which is over double the climax level.

Usually a bottom is within reach after a climax of this magnitude.

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 levle - 17.18

The VIX closed yesterday at 27.63 or above the minor 26.56 level.

If it closes above 26.56 today, it would want to move up to 31.25.

Of course, 27.78 (top band on daily) should be resistance.
Watch how it trades around this level.

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

1,875 is a major level of support.? And it is within 4 points of the 1,875 support line.

1,886 is the lower band on the daily chart.
Reclaiming this level would be bullish.

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
Major level - 100.00
Major level - 96.88
Major level - 93.75

The QQQ closed yesterday one penny under the 100 level.
Higher levels should act as resistance.

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 moved strongly yesterday on a flight to safety, closing at 123.62.

A close today above 122.66 and it should move 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 dropped back down, closing at 108.42.
107.03 should act as support.

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
Major level - 59.38

The XLE dropped down and is trading $.50 above the 59.38 level.

The key for the XLE is 56.25.? If it takes out this level, it could drop another 6 -7 points.

Trading as if oil is going out of business.

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 has moved into a downtrend on the daily chart and I would expect 117.50 level to act as resistance.?

It dropped to under the 112.50 level.?

Watch list:
Bullish Stocks:? NKE, FL, ATO,? WX, FLO, NVDA, SDS

Bearish Stocks: ALXN, JAZZ, PVH, BIDU, FFIV, ZBH, MON, CAT, CMI, MMM, MWE, DD, APA, FDX

Be sure to check earnings release dates.