August 6, 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 market meltup continues. Yesterday, the S & P 500 closed 21.26 points higher.

The S & P closed at 3,327.77. This now creates a scenario that sets up further movement to the upside.

I say this because the market had its first close above 3,320.25. This now sets up a scenario where if the market can close above this level today, it should head up to the next major level.

The second scenario is what I mentioned yesterday. And that is that the daily chart for the S & P 500 did cross over into an uptrend.

This is significant because all long term timeframes are now in uptrends. This brings the daily chart into alignment with the weekly and monthly charts.

And there are other price expectations based on this crossover. By the way, I use a 200 ema crossing above a 253 day simple moving as the definition of a bullish crossover.

Because these averages are so long, when there is a crossover, they are significant.

And because the 200 ema is roughly equal to the midband, which is the 253 day simple moving average, this should be a strong support level on a pullback.

The daily price bar closed at 78% of the range of the bar. This still suggests we should see the high violated before the low.

The support area from yesterday's daily bar is in the 3,322 to 3,324 area.

Pre open, the S & P is relatively flat.

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.

ROKU reported last night and is off about $7.

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 22.99. The VIX closed .77 points lower for the day.

This was the second close under 24.22. This now suggests that the VIX should drop to 21.88.

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

S & P 500:

Major level: 3,437.40 <
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 3,327.77. With a second close above minor 3,320.25 level, the objective for the S & P should be up to 3,427.20.

And the minor 3,320.25 level should be support.

Technical support is around 3,307.36.

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 271.05. Yesterday was now the second close above 270.31 level. This now suggests that the objective for the QQQ should be up to 275.

270.31 should be support, along with 268.75.

The upper band is now 274.73. Watch this level.

Support is in the 270 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 153.79. The IWM $3 higher. And a close today above 151.56 and the IWM should test 156.25.

151.56 should be support.

And support should be at the midband, which is 145.81.

And 151 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 170.07, closing 1.50 lower. Watch the minor 171.10 level today. A close today under it and the TLT should drop to 168.75.

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

169.63 should now be support. And the 168 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 191.35. Watch the major 190.63 level. The GLD took out the major level.

The GLD is now overbought and a pullback is possible.

The upper band is now182.32. And the GLD continues to trade well above it.

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

188 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 37.43. 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.

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 440.25. Apple closed another $1.59 higher yesterday.

Apple closed above the upper band on the daily chart. The upper band is 424.24. 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 437.77.

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