August 11, 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.

Yesterday, I added a covered call on PRA. As PRA only has monthly options, the trade suggested the August monthly options, which expire in two weeks.

The S & P 500 continued this bull run. Monday, the S & P 500 closed 9.19 points higher.

The day closed at 3,360.47. And the day closed out at 90% of the range of the daily bar.

The intraday range was 27.85 points. Once again, the daily range contracted. The intraday range was only 69% of the average daily range.

This was the 6th consecutive day where the range contracted.

And with the high close percentage, the odds still favor the high being violated before the low.

And pre open, the S & P is trading about 18 points higher. Assuming this trading holds up through the open, the market should open about 15 points above yesterday's high of 3,363.29.

Assuming profit taking at the open, support could be at 3,370. If this level does not hold, then look for the high of 3,363.29 to offer support. Under the high, support should be at the close of 3,360.47. The close is also right around a minor support level, which is 3,359.

On a larger sell off, the midpoint of 3,349 should be support.

The support area from last week is in the 3,318 to 3,320 area.

Earnings are slowing down. This week we get earnings from CSCO and LYFT on Wednesday, after the close.

BABA and NTES report Thursday, before the open.

And BIDU reports Thursday after the close.

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

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 22.13. The VIX closed .08 points lower for the day.

At this point, for the VIX to move higher, it will need two closes above 22.66.

On the downside, the VIX has not closed under 21.88. Watch for a break under this level. If it does, them 22.66 should be resistance, along with 21.88.

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

Technical resistance is around 23.

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 3,360.47. The target for the S & P should be up to 3,437.20.

And the minor 3,320.25 level should be support. Minor resistance is at 3,359. Watch to see if the S & P can hold 3,359, after closing just above it. If it can, it should continue its bull move.

Technical support is around 3,345.

QQQ:

Major level: 281.25
Minor level: 279.69
Minor level: 276.56
Major level: 275.00
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 270.31. The QQQ closed 1.16 lower on the day.

It closed exactly on the minor level. A close today above 270.31 and the QQQ should head back up.

The key now will be to see if the QQQ can clear 275 and the upper band, which is 277.44.

268.75 should be support.

Support is in the 268 area.

IWM:

Major level: 162.50
Minor level: 160.94
Minor level: 157.81 **
Major level: 156.25 HIT
Minor level: 154.70
Minor level: 151.56
Major level: 150.00
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

The IWM closed at 157.79. The next minor level is 157.81. Two closes above this level and the IWM should head up to 162.50.

156.25 should be support. And 154.70 as well.

And support should be at the midband, which is 145.90. The IWM is moving away from the midband. Next target should be the upper band, which is 187.

The IWM is at the upper band on the 60 minute chart, which is 157.77. Short term the IWM is overbought a pullback should be coming.

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 169.12, closing .76 lower. Watch the major 168.75 level. A break under this and the TLT should continue lower.

169.53 should be resistance.

The 170 area is technical resistance.

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 190.15. The GLD closed .66 lower on the day.

The GLD is now overbought and a pullback is possible. And is pulling back as expected. And it pulling back as expected.

To move lower, the GLD will need two closes 189.85.

The upper band is now 184.75. And the GLD continues to trade well above it.

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

The 192 area should offer resistance.

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
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 38.33. The XLE did clear 37.50, and managed to close above 38.28.

A close today above this level and the XLE should head up to 40.63.

36.72 should be support. And the XLE has crossed into an uptrend on the 60 minute chart. This does suggest a move higher and support at 37.

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 450.91. Apple closed another $6.46 higher.

Apple closed above the upper band on the daily chart. The upper band is 431.82. This should be support now.

Apple sold off from above the upper band on the 60 minute chart. The upper band is 459.91. And should now be resistance.

I would like to see a larger pullback before entering.

WATCH LIST:

Bullish Stocks: AMZN, CHTRM NTES, NVDA, AAPL, ROP, DXCM, HUM, COST, MA, W INTU, WST, HD, FB, BABA, KLSC, CMI, PYPL, ITW

Bearish Stocks: STZ, CDW, BAX, HAE, RL, VLO, BX, HQY, MU, WDC, HFC, FL, CLR