August 5, 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 S & P 500 continues to move above the 3,281.20 objective. Yesterday, the S & P closed 11.90 points higher.

The day closed out at 3,306.51. Adnt eh daily price bar made another higher high and higher low.

The day closed out at 98% of the range of the daily bar. This does suggest we will see the high violated before the low.

And based on the pre market trading, that should be the case.

As I write this, the S & P is trading almost 20 points higher. Considering the fact that the market closed almost at the high for the day, we should should see yesterday's high of 3,306.84 taken out on the first print.

Assuming the bullish gap open, the high should be support on a pullback. Also, the 50% level of the projected gap, which is 3,316 should also be a level to watch.

And the support area from yesterday's daily price bar is in the 3,296 to 3,298 area.

The S & P is very close to crossing over into an uptrend on its daily chart. The 200 ema is 3,027.58 and the 253 day average is 3,028.17.

As you can see, these averages are now within one point of each other. I bring this up because if the daily chart can cross into an uptrend, it would suggest that we will see even higher prices.

And when you consider the sell off the market had at the beginning of the year, this seems even more unimaginable.

But, five months after the market bottomed it is now very close to crossing into an uptrend.

I would expect that after we see the bullish crossover, the upside objective should be to the upper band on the daily chart. The upper band is 3,586.76.

And as of yesterday, the market is within 280 points of it.

I will continue to monitor this crossover.

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.

DIS reported and is trading about $7 higher. SQ did report after the close yesterday and is up $15.

ROKU reports today 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 23.76. The VIX closed .52 points lower for the day.

Yesterday was the first close under 24.22. A close today under this level would suggest a drop to 21.88.

The VIX is starting to drop under the midband on the daily chart. The midband is 25.04.

This level should be resistance. And technical resistance is around 25.

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 3,306.51. The next minor level is 3,320.25. Watch this level today as the market should test this today. Watch to see if it holds as support.

After taking out the major level, the next minor level is the key. If this level cannot hold, it is possible that we will see some profit-taking.

But short term trends remain bullish, so even if the market had a pullback, I would expect a continuation of the bull move.

Technical support is around 3,280 now.

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 270.38. The QQQ closed 1 point higher on the day.

This was the first close above 270.31, A close today above it and the QQQ should test 275.

The upper band is now 273.87. Watch this level.

Support is in the 267 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 150.79. The IWM closed above the 150 level. The next minor level is 151.56.

Two closes above 151.56 and the IWM should test 156.25.

Support should be at the midband, which is 145.78.

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 171.57, closing 1.62 higher. The TLT came to within 30 cents of the major 171.88 level.

Watch to see if the TLT breaks above 171.8. If it does, it should go higher.

169.63 should now be support. And 170 area is still technical support.

GLD:

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
Minor level: 180.47
Minor level: 178.91
Major level: 178.13
Minor level: 177.35
Minor level: 175.78

The GLD closed at 189.59. Watch the major 190.63 level. The GLD is now within one point of it.

The upper band is 181.50. And the GLD continues to trade well above it.

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

186 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 37.04. The XLE reversed to the upside.

Watch to see if it can clear 37.50. If it can, it should head higher.

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.

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 438.66. Apple closed another $2.91 higher yesterday.

Apple closed above the upper band on the daily chart. The upper band is 421.77. 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 431.66.

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