July 22, 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 closed out 5.46 points higher yesterday. The S & P closed at 3,257.30.

The market got as high as 3,277.29 before it sold off to hit a low of 3,247.77.

You hopefully recognize that the high came to within 3.91 points of the 3,281.20 objective.

Close enough for me to say the target has been hit. With an index trading around 3,300, the 3.91 point difference is really quite immaterial.

As it turned out, the intraday range was only 29.52 points. And the daily price bar closed at 32% of the range for the day.

This now suggests that the low of 3,247.77 should be violated before the high of 3,277.29.

The 3,262 area should be resistance.

I also need to mention that yesterday's range of 29.52 points was about one half the daily average true range, which is now 52.53 points.

So, where do we go from here?

Pre open, the S & P is trading about 8 points lower. This would project to an open around 3,249 or about 2 points above the low.

Watch the low. A break under the low would imply further selling pressure.

And if the low is violated, I would expect support to come in at the minor 3,242.15 level.

The other level to watch on a sell-off would be last week's high of 3,238.28. As this is within 4 points of the minor level, this area should offer strong support.

After the close today, we get earnings from ALGN, CMG, MSFT and TSLA.

Thursday morning we get earnings from TWTR and CTXS.

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 24.84. The VIX closed .38 points higher for the day. And with the S & P closing higher as well, this is a divergence.

Having said that, the VIX did close under the major 25 level for the second time. This would suggest that 25.78 should still be resistance.

And watch the minor 24.22 level. Two closes under this level and the VIX should drop.

The VIX closed virtually on the midband on the daily chart. The midband is 24.62. Watch this level.

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 3,257.30. The objective for the S & P should still be up to 3,281.

And with a close above 3,242, this level should now be support.

Also, support should be at the minor 3,164 level.

Technical support is around 3,245.

QQQ:

Major level: 268.75
Minor level: 267.18
Minor level: 264.05 **
Major level: 262.50 Hit
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 264.00. The QQQ closed 2.78 lower.

The key at the moment is the upper band on the daily chart. That level is 265.96.

The QQQ will either pullback from this level and close back above it and head higher.

But, I am still looking for support around the major 262.50 level. Technical support is also around this level.

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 < Hit
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 148.03. The objective for the IWM should still be up to 150. And the IWM came to within 90 cents of the target.

And the IWM is now about 2 points above the midband on the daily chart, which is now 145.98.

This level should now be support.

145.31 should be support. And 147 should be technical support.

TLT:

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
Major level: 159.38
Minor level: 158.60

The TLT closed at 167.29. The objective for the TLT should be up to 168.75.

165.63 should now be support. Watch this level. A break under
his level and the TLT should head lower.

The TLT needs to clear the 167 level to move higher. And it is just above it. so, watch this level today. This level should be support now.

GLD:

Major level: 175.00
Minor level: 174.25
Minor level: 172.70 **
Major level: 171.89 HIT
Minor level: 171.11
Minor level: 169.54
Major level: 168.75
Minor level: 167.98
Minor level: 166.41
Major level: 165.63
Minor level: 164.85
Minor level: 163.28
Major level: 162.50

The GLD closed at 173. The GLD took out the 171.89 objective.

This now suggest that if the GLD can close above 174.25 today, it should test 175.

171.89 should be support.

Technical support should also be at 172.

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 38.26. The XLE managed to close above the major 37.50 level. If will need two closes above 38.28 to head higher.

The 36.72 level should now be support. 37.50 should also be support.

AAPL:

Major level: 400.00
Minor level: 396.88
Minor level: 390.63 **
Major level: 387.50 < Hit
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 388. Apple closed 5.43 lower. Watch to see if Apple can hold the major 387.50 level.

However, Apple is right at the upper band on the daily chart. That level is 406. This sets up a few price expectations.

And technical support is also around 387.

WATCH LIST:

Bullish Stocks: REGN, CHTR, NOW, ILMN, LRCX, ALGN, APD, RH, MKC, CMI, ITW, VRSK, CTXS, TREX, DGX, VRNS, PGR, LOGM

Bearish Stocks: VMW, ADI, AZPN, C, PLAN, APPN, NTNX, SUN