July 1, 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 closed out the first half of 2020 with follow-through from Monday's rally.

The S & P 500 closed 47.05 points higher, eclipsing the 44.19 move on Monday.

The day closed out at 3,100.29. And yesterday's high hit 3,111.51, which put the market to within 14 points of 3,125 objective.

Yesterday also closed above the high of the bearish long range candle from Friday. The high Friday was 3,073.73. However, it is just short of the high from the bearish long range candle from the June 24th, which was 3,115.01.

I mention this because a close above the high of the bearish long candle is very bullish.

Also, yesterday's range increased from Monday. The range for the day was 63.68 points, which almost hit the daily average true range of 65.59.

In addition, the S & P closed at 82% of the range of the daily bar. This suggests that yesterday's high should be violated before the low.

The support area from yesterday's daily price bar is in the 3,075 to 3,080 area.

With yesterday closing out the month of June, I wanted to take a look at the key points from that timeframe.

First, June did close higher. In fact, for the month, June closed 55.98 points higher than May. This of course is bullish.

The range for the month was 267 points. This did actually exceed the monthly average true range, which is 263 points.

But, the range was the lowest monthly range this year, with the exception of the January range, which was only 123 points.

And the monthly bar closed at 50% of the range of the monthly bar.

This suggests that the June monthly bar formed a doji candle, with mean indecision.

So, with a doji and a smaller range, the move above the high or below the low should be rather large.

So, the key levels to watch are the high of 3,233.13 and the low of 2,965.66.

The other key level is the close of 3,100.29, which is the midpoint.

The other key level to monitor from the monthly chart is the upper band, which is now 3,188.

The price did get above the upper band in June, but could not close above it.

And finally, the other key level to monitor is the midband on the daily chart, which is 3,007.

So, we have resistance at 3,118 and support at 3,007.

Pre open, the S & P is trading about 15 points lower. This projects to an open around 3,085. Watch the intra day levels mentioned above.

Here are the Key Levels for the Markets:

$VIX:

Major level: 37.50
Minor level: 36.72
Minor level: 35.16
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

The VIX closed at 30.43. It closed 1.35 lower on the day. This was the first close under the minor 30.47 level.

This now suggests that if the VIX closes under 30.47 today, it should drop to 28. And 32 should be resistance.

And technical resistance is at 32 as well.

S & P 500:

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
Major level: 2,812.50
Minor level: 2,773.45
Minor level: 2,695.35
Major level: 2,656.30

The S & P closed at 3,100.29. 3,007.85 level should still be support. And 3,046 is a minor support level as well.

The market should open around the minor 3,085.95 level. Watch to see if the S 7 P can hold this level. If it can, it should run up to 3,125.

Technical support is around 3,074.

QQQ:

Major level: 256.24
Minor level: 265.68
Minor level: 251.56
Major level: 250.00
Minor level: 248.54
Minor level: 245.31 **
Major level: 243.75
Minor level: 242.15
Minor level: 239.00
Major level: 237.50
Minor level: 235.91
Minor level: 232.78
Major level: 231.22

The QQQ closed at 247.60. This was the first close above 245.31 for the QQQ. A close today above this level and the QQQ should test 250.

The 245.31 level should be support.

Technical support is around 243. Short term charts remain bullish.

IWM:

Major level: 156.25
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
Minor level: 132.81
Major level: 131.25

The IWM closed at 143.18. This now suggests that if the IWM closes above 139.06 today, it should test 143.75. And yesterday's high went to 143.62.

The IWM is making a run at the midband, which is 146.53. Of course, what the market will do at that level should tell us quite a bit as to the next move.

The minor 142 level should be support.

Technical support is now at 140.

TLT:

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
Minor level: 155.47
Minor level: 153.91
Major level: 153.13

The TLT closed at 163.83. The objective should be down to 162.50.

164.85 should be resistance.

Support is still around 162, which is the midband on the 60 minute chart. And technical resistance is at 165.

GLD:

Major level: 168.75
Minor level: 167.98
Minor level: 166.41 **
Major level: 165.63 Hit
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
Minor level: 155.47

The GLD closed at 167.37. The objective for the GLD should be to 168.75.

If needs to clear the minor 167.98 level.

The upper band is 168 on the 60 minute chart. The GLD sold off from the upper band and is making another run at it.

Support should be at 166.

XLE:

Minor level: 47.65
Major level: 46.88
Minor level: 46.09
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: 34.27

The XLE closed at 37.85 The XLE managed to close above the major 37.50 level.

To move higher, the XLE will need two closes above 38.28.

The midband on the 60 minute chart is now 39 and the XLE is below it. This should now be resistance. This level is 39 and the XLE will need to clear it to head higher.

The 36 area should be support.

AAPL:

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
Minor level: 340.63
Major level: 337.50
Minor level: 334.38
Minor level: 328.13
Major level: 325.00

Apple closed at 364.80. Apple closed 3.05 points higher.

The 362.50 level should be support. And watch to see if Apple can clear 365.

Technical support is around 360.

WATCH LIST:

Bullish Stocks: AMZN, MELI, SHOP, NTES, AAPL, RNG, COUP, SPOT, ZM, WIX, VEEV, HUBS, TWLO, SPLK, DOCU, ALNY, WING, EA

Bearish Stocks: LMT, NOC, COST, INTU, APD, BDX, PANW, ANET, VRSN, JAZZ, CHKP, KEYS, CYBR, HCA