December 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 suggested closing the CVS spread after one day. The gain for one day worked out to 33%.

The market took a slight pause yesterday. For the day, the S & P 500 closed 2.29 points lower.

The day closed out at 3,666.72. The range for the day was only 25.56 points. For the second day in a row, the range for the S & P was 54% of the daily average true range.

The daily average true range is now 47.08 and has been steadily moving lower.

And we have now had 17 consecutive days where the daily range did not exceed the average true range.

The last time it did exceed the average was on Monday November 9th, when the market had the bullish long range candle.

The high for that day was 3,645.99 and the midpoint was 3,596.74. Both these levels should still be key pressure points for the market.

In fact, this week, we had had two days where the daily low was right around the high of 3,645.99.

This level should still be a valid support level.

The key levels to watch today are the high, close, and low. Respectively, these levels are 3,682.73, 3,666.72 and 3,657.17. Watch to see how the market reacts around these levels.

In taking a look at how the weekly price bar is forming, the range through yesterday was 88.34 points. This is 67% of the weekly average true range, which is 132.62 points.

If I project the weekly average to the high, it would work out to 3,727.

This projection would be about 23 points below the objective we are looking for.

And it would be above the upper band on the weekly chart. That level is 3,720.

The midpoint of the weekly bar is 3,638.56 and yesterday's close was about 28 points above it. This should be a support level on a sell off.

Pre open, the S & P is trading about 10 points higher.

This projects to an open around 3,677. This would be about 6 points below yesterday's high of 3,682.73. Watch to see if the market can clear yesterday's high on a rally.

On a sell off, watch the close of 3,666.72 for support.

DOCU reported and is trading about $15 higher. ULTA is trading about $11 lower after reporting.

Here are the Key Levels for the Markets:

$VIX:

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 <
Minor level: 21.10 **
Minor level: 19.53
Major level: 18.75

The VIX closed at 21.28. The VIX closed .11 points higher. I mentioned
yesterday that 21.88 should still be resistance and it turned out that yesterday's high was exactly 21.88.

This level should still be resistance.

A break under 21.10 and the VIX should head lower.

22.66 should also be resistance.

Technical resistance is still around 21.50.

S & P 500:

Major level: 3,749.80 <
Minor level: 3,710.75
Minor level: 3,632.65 **
Major level: 3,593.60 <
Minor level: 3,554.55
Minor level: 3,476.45
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

The S & P closed at 3,666.72. The S & P closed 2.29 points lower.

The objective for the S & P is now to the 3,749.80 level.

And support should be at the 3,632.65 level.

3,654 should be technical support.

QQQ:

Major level: 306.25 <
Minor level: 304.69
Minor level: 301.56 **
Major level: 300.00 Hit
Minor level: 298.44
Minor level: 295.31
Major level: 293.75
Minor level: 292.19
Minor level: 289.06
Major level: 287.50
Minor level: 285.94
Minor level: 282.81
Major level: 281.25
Minor level: 279.69

The QQQ closed at 303.28. The QQQ closed .43 higher. The objective for the QQQ should be for a test of 306.25.

Support should be at the 301.56 and 300 levels.

Technical support is also around 302.

IWM:

Major level: 187.50
Minor level: 181.25
Minor level: 176.56 **
Major level: 175.00
Minor level: 173.44
Minor level: 170.31
Major level: 168.75
Minor level: 167.19
Minor level: 164.06
Major level: 162.50
Minor level: 160.94
Minor level: 157.81
Major level: 156.25
Minor level: 154.70

The IWM closed at 183.92. The IWM closed 1.03 higher on the day.

The objective for the IWM should still be to 187.50.

I am looking for a retest of the upper band on the 60 minute chart. That level is 195.

183 should be technical support.

TLT:

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
Major level: 159.38
Minor level: 158.60
Minor level: 157.03
Major level: 156.25 Hit
Minor level: 155.47
Minor level: 153.91
Major level: 153.13

The TLT closed at 157.51. It closed 1.26 higher.

The TLT dropped under the midband on the 60 minute chart. This level, which is now 159, should be resistance. Watch this level on a bounce.

158.60 is a minor resistance level.

GLD:

Minor level: 182.03
Major level: 181.25
Minor level: 180.47
Minor level: 178.91
Major level: 175.00
Minor level: 174.25
Minor level: 172.70 **
Major level: 171.88 <
Minor level: 171.10
Minor level: 169.53
Major level: 168.75
Minor level: 167.97

The GLD closed at 172.81. The GLD closed 1.35 higher on the day.

The GLD closed above the 172.70 level. A close today above this level, and the GLD should test 175.

The GLD continues to bounce from its oversold condition.

The midband on the 60 minute chart should be resistance. That level is 176.14 and should be resistance.

XLE:

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
Minor level: 30.47
Minor level: 28.90
Major level: 28.13

The XLE closed at 38.53. The XLE closed .40 higher on the day. The midband on the daily chart is 38.87 and the XLE is just under it. The XLE needs to recoup the midband to head higher.

A close today above 38.28 and the XLE should head up to 40.63.

I still expect another rally because the XLE did manage to close above the upper band on the 60minute chart. Support should be around 38.

AAPL:

Minor level: 140.63
Major level: 137.50
Minor level: 134.38
Minor level: 128.13
Major level: 125.00 <
Minor level: 121.88
Minor level: 115.63 **
Major level: 112.50
Minor level: 109.13
Minor level: 103.13
Major level: 100.00

Apple closed at 122.94. Apple closed $.14 lower.

Target now should be up to the 125 level. And the 121.88 level should be support.

121.50 should be technical support.

WATCH LIST:

Bullish Stocks: TTD, GOOGL, TSLA, RH, LRCX, ASML, AVGO, COST, ZBRA, PANW, COUP, ADSK, ANET, ULTA, DE, KLAC, GS, URI, TEAM, SQ, V, ITW, HON, AMP, KSU, MCK, CAT

Bearish Stocks: AMT, BIDU, BAX, K, CNC, FE