August 4, 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.

I did suggest you close the DXC position, thereby booking the profit on the trade. The result was a gain of just over 15% for about a month and one half. DXC reports this week and I preferred to close ahead of earnings.

I also suggested adding a debit spread on HOG. The trade was limited to 1% risk and a potential gain of over 100%.

As expected, the S & P 500 took out the 3,281.20 objective we were looking for.

The market ended the day closing at 3,294.61, or about 13 points above the objective.

The intra day range was only 18.20 points. But, this was mainly because of the bullish gap open of 17.14 points. The day closed out at 55% of the range of the daily bar.

This is still a bullish bias with the odds favoring the high being violated before the low.

But, with the gap, this now creates an open gap at Friday's high of 3,272.17. Markets tend to fill gaps, so watch this area today. The 50% level of the gap is 3,278 and could also be a potential area of support.

The support area from yesterday's daily price bar is in the 3,291 to 3,294 area.

And 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.

Pre open, the S & P is trading about 14 points lower. This would project to an open around 3,280. Watch the gap levels for potential support.

DIS reports this afternoon after the close. ROKU and SQ report Wednesday after the close.

And BKNG reports Thursday, after the close.

Here are the Key Levels for the Markets:

$VIX:

Major level: 34.38
Minor level: 33.60
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 <
Minor level: 24.22 **
Minor level: 22.66
Major level: 21.88

The VIX closed at 24.28. The VIX closed .18 points higher for the day.

The VIX closed again under the 25 level. And at this point, the VIX will need two closes under 24.22 to drop to 21.88. And it still has not had that.

Once again, the VIX continues to trade around the midband on the daily chart. That price level is now 25.02. And this is right around the major 25 level, which should be resistance.

The VIX will either break under the midband or mount a rally to close above it. The odds favor the VIX breaking.

S & P 500:

Minor level: 3,398.35
Minor level: 3,320.25
Major level: 3,281.20 < HIT
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
Major level: 2,812.50
Minor level: 2,773.45

The S & P closed at 3,294.61. The S & P closed above the 3,281.20 objective. This level should be support as well as the minor 3,262 area.

The next minor level is 3,320.25 on the upside. On the downside, the minor 3,164 level should be support.

Watch for support at 3,281.20 after it is taken out.

Technical support is around 3,260.

QQQ:

Major level: 275.00
Minor level: 273.44
Minor level: 270.31
Major level: 268.75 < HIT
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
Minor level: 251.56
Major level: 250.00

The QQQ closed at 269.38. The QQQ closed 3.59 points higher on the day.

And the QQQ took out the 268.75 target. Watch the upper band, which is 272.95. The QQQ is trading just under it.

Support is in the 265 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 149.76. The IWM is still trading just above the midband on the daily chart, which should now be support. That price level is 145.78.

To move higher, the IWM will need to clear 150. And yesterday's high came to within 3 cents of it.

The minor 145.31 level should be support. And 148 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 169.95, closing .86 lower. At this point, I would expect the TLT to drop to 168.75.

Watch to see if the TLT breaks under 168.75. If it does, it should go lower.

168.75 should now be support. And 170 area is still technical support. And 171.88 should be resistance.

GLD:

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
Minor level: 180.47
Minor level: 178.91
Major level: 178.13
Minor level: 177.35
Minor level: 175.78
Major level: 175.00
Minor level: 174.25
Minor level: 172.70
Major level: 171.89

The GLD closed at 185.64. The GLD should test 186.72.

The upper band is 180.74. And the GLD continues to trade above it.

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

184 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 36.16. Biased for a drop to 34.37. Watch the minor 36.72 level today for resistance.

The 36 area could offer support.

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 435.75. Apple closed another $10.71 higher yesterday.

Apple closed above the upper band on the daily chart. The upper band is 419.15. 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 423.95.

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