August 7, 2020 - MDT Pro Tips

While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to a 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.

The bull run continued yesterday. The S & P 500 closed 21.39 points higher. The market closed out at 3,349.16.

This was the second consecutive day where the S & P 500 closed above the 3,320.25 level. This now suggests that the minor 3,320.25 level should be support.

And it suggests that the objective should now be to the 3,437.40 level.

Yesterday, the S & P 500 closed at 94% of the range of the daily bar. This does suggest the upmove should continue.

The support area from yesterday's daily price bar is in the 3,334 to 3,336 area.

Pre open, the S & P is trading about 12 point lower. This projects to an open around 3,337. This would be just above the daily support area.

The unemployment report will be released at 8:30 EST, so this could produce a volatile move.

Scaling back to look at how the weekly price bar is setting up, the weekly bar through yesterday has a range of only 66.50 points. This is less than 50% of the weekly average true range.

The weekly average true range is 145 points. To hit the average, the S & P would need a move of 79 points above yesterdays high.

Assuming, we don't see that today, this would mean that this week would be the seventh consecutive week where the weekly range was less than the average weekly range.

This would suggest that we will see an expansion coming. Perhaps next week.

The midpoint of the weekly bar is 3,318 and yesterday's close was about 30 points above it.

The support area from last weeks weekly price bar is in the 3,245 area,

The support area from the July monthly price bar is in the 3,188 to 3,190 area.

DDOG reported last night and is trading about $7 lower.

Here are the Key Levels for the Markets:

$VIX:

Minor level: 32.03
Major level: 31.25
Minor level: 30.47
Minor level: 28.91
Major level: 28.13
Minor level: 27.35
Minor level: 25.78
Major level: 25.00 Midband
Minor level: 24.22
Minor level: 22.66 **
Major level: 21.88 < HIT
Minor level: 21.10 **
Minor level: 19.53
Major level: 18.75

The VIX closed at 22.65. The VIX closed .34 points lower for the day.

The low yesterday for the VIX was 20.97, which put the VIX below the 21.88 objective.

Watch to see if this level holds as support.

The VIX is now breaking under the midband. Look for resistance at the 25 level, which is also the midband.

To move lower, the VIX will need two closes under 21.10.

S & P 500:

Major level: 3,437.40 < TARGET
Minor level: 3,398.35
Minor level: 3,320.25 **
Major level: 3,281.20
Minor level: 3,242.15
Minor level: 3,164.00
Major level: 3,125.00
Minor level: 3,085.95
Minor level: 3,007.85
Major level: 2,968.80
Minor level: 2,929.75
Minor level: 2,851.65

The S & P closed at 3,349.16. The S & P should be up to 3,427.20.

And the minor 3,320.25 level should be support. Minor resistance is at 3,359.

Technical support is around 3,320.

QQQ:

Major level: 281.25
Minor level: 279.69
Minor level: 276.56 **
Major level: 275.00 HIT
Minor level: 273.44
Minor level: 270.31
Major level: 268.75
Minor level: 267.18
Minor level: 264.05
Major level: 262.50
Minor level: 260.93
Minor level: 257.80
Major level: 256.25
Minor level: 254.69

The QQQ closed at 274.64. This now suggests that the objective for the QQQ should be up to 275. And yesterday's high went to within 2 cents of it. close enough to say it was hit.

273.44 should be support, along with 268.75.

The upper band is now 275.71. Watch this level.

Support is in the 271 area.

IWM:

Major level: 156.25
Minor level: 154.70
Minor level: 151.56 **
Major level: 150.00 < HIT
Minor level: 148.44 **
Minor level: 145.31
Major level: 143.75
Minor level: 142.19
Minor level: 139.06
Major level: 137.50
Minor level: 135.94
Minor level: 132.81
Major level: 131.25

The IWM closed at 153.73. The IWM should test the 156.25 level.

151.56 should be support.

And support should be at the midband, which is 145.84.

And 152 should be technical support.

TLT:

Major level: 171.88
Minor level: 171.10 **
Minor level: 169.53
Major level: 168.75
Minor level: 167.97
Minor level: 166.41
Major level: 165.63
Minor level: 164.85
Minor level: 163.28
Major level: 162.50
Minor level: 161.72
Minor level: 160.16

The TLT closed at 171.02, closing .95 higher. Watch the minor 171.10 level today. If the TLT can clear this level it should head higher.

Watch to see if the TLT breaks above 171.88. If it does, it should go higher.

169.63 should now be support. The 171 area is technical support.

GLD:

Minor level: 194.54
Major level: 193.76 <
Minor level: 192.98
Minor level: 191.41
Major level: 190.63
Minor level: 189.85
Minor level: 188.28
Major level: 187.50
Minor level: 186.72
Minor level: 185.16
Major level: 184.38
Minor level: 183.60
Minor level: 182.03
Major level: 181.25

The GLD closed at 193.89. This put the GLD just above the major 193.76 level.

Watch this level today. To move higher, the GLD will need two closes above 194.54.

The GLD is now overbought and a pullback is possible.

The upper band is now182.23. And the GLD continues to trade well above it.

It should be support until a close under the upper band.

191 is technical support.

XLE:

Minor level: 44.53
Major level: 43.75
Minor level: 42.97
Minor level: 41.41
Major level: 40.63
Minor level: 39.83
Minor level: 38.28 **
Major level: 37.50 Target - HIT
Minor level: 36.72 **
Minor level: 35.15
Major level: 34.37
Minor level: 33.59
Minor level: 32.03
Major level: 31.25

The XLE closed at 37.13. Watch to see if it can clear 37.50. If it can, it should head higher. Yesterday's high did breach the 37.50 level, but the XLE could not close above it.

The 36 area could offer support. And watch the 37.40 area. This should be resistance, so if the XLE cannot clear this level, it would pull back. Look for a move above 37.40.

The XLE needs to clear 37.25 to move higher.

AAPL:

Major level: 400.00
Minor level: 396.88
Minor level: 390.63
Major level: 387.50
Minor level: 384.38
Minor level: 378.13 **
Major level: 375.00 <
Minor level: 371.88
Minor level: 365.63
Major level: 362.50
Minor level: 359.38
Minor level: 353.13
Major level: 350.00
Minor level: 346.88

Apple closed at 454.79. Apple closed another $15.33 higher yesterday.

Apple closed above the upper band on the daily chart. The upper band is 426.46. This should be support now.

Apple is also above its upper band on the 60 minute chart. Not a time to go long. Wait for a move back inside the upper band on the 60 minute. The upper on the 60 is 445.41.

WATCH LIST:

Bullish Stocks: MELI, CHTR, NOW, AAPL, LRCX, LRCX, UNH, RH, WST, ANET, PANW, VRSN, SPLK, PYPL, CMI, FDX, TTWO, WING, FDX

Bearish Stocks: GS< PH, STZ, BA, MMM, CB, BFAM, CBOE, MAR, CRI