July 29, 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 reversed back to the downside yesterday, closing 20.97 points lower on the day.

The S & P closed out at 3,218.44.

But, once again, our close percentage projection did work out as projected.

From yesterday's update, I wrote: "The daily bar closed at 93% of the range for the day. This does suggest that yesterdays high should be violated before the low."

And as it turned out, the S & P rallied to a new high of 3,243.72 at just before 2:00 EST. This took out Monday's high of 3,241.43 by 2.29 points.

So, once again this projection worked.

After topping out at about 2:00 EST, the S & P sold off and took out the intra day low. It did not take out Monday's low of 3,214.25. In fact, the low for the day was 3,216.17.

As I have said many times, the close percentage simply refers to the odds that the high or low will violate the prior day high or low. It does not suggest that once the high or low is violated that price will continue in that direction. Though it can and often it does.

With yesterday's price bar closing at only 8% of the range for the day, the odds favor the low being taken out before the high.

So, watch yesterday's low of 3,216.17.

And the resistance level from yesterday is in the 3,226 to 3,230 area.

The key at the moment is that the VIX continues to trade around the midband on its daily chart.

The VIX got to just below the midband, which is 24.87 before bouncing back to close above it. The VIX closed at 25.44 or about 60 cents above the midband.

We still have not had a clear directional bias for the VIX at the midband. In other words, it has not clearly broken down, nor has it clearly held as support.

The only thing we do know is that the VIX or any market tends to bounce around the midband before the next directional move.

Pre open, the S & P is trading about 9 points higher. This projects to an open around 3,227 or right in the middle of the daily price bar support area, which is 3,226 to 3,230.

Watch how the market reacts around this level. Also, watch the VIX and the midband.

SHOP reported and is trading about $69 higher in the pre market.

FB reports after the close today.

AMZN reports after the close on Thursday. Along with GOOGL, AAPL, SHAK, and ZEN.

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 25.44. The VIX closed .70 points higher for the day.

To move lower, the VIX needs two closes under 24.22. And at this point, the 25.78 level should be resistance.

The VIX continues to trade around the midband on the daily chart. That price level is now 24.87.

Watch how it trades around the midband.

Look for technical support around 25. A break under it and the VIX should head lower.

S & P 500:

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

The S & P closed at 3,218.44. The S & P did test the 3,242.15 level but could not close above it. This does suggest the S 7 P should test 3,125.

Support should be at 3,164.

The market should open around 3,227. The lower end of the support area is 3,227. So, watch to see if this holds as support.

Technical support is around 3,172.

QQQ:

Major level: 268.75
Minor level: 267.18
Minor level: 264.05
Major level: 262.50
Minor level: 260.93
Minor level: 257.80 **
Major level: 256.25 Hit
Minor level: 254.69
Minor level: 251.56 *
Major level: 250.00

The QQQ closed at 256.81. The QQQ closed 3.31 point lower on the day.

Watch the major 256.25 level. It should be support, if it can't hold I would expect a further sell off.

Technical support is around 254.

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 146.13. At this point, we have the minor 148.44 resistance level on the upside. And the midband, which is 145.86 on the downside.

Watch either end for a violation.

Also, the 143 area 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 170.28, closing 1.17 higher. A close today above 169.53 and the TLT should test 171.88.

Watch to see if the TLT breaks under 168.75. If it does, it should get lower.

168.75 should now be support. And 170 area is technical resistance.

GLD:

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
Major level: 175.00
Minor level: 174.25
Minor level: 172.70
Major level: 171.89
Minor level: 171.11
Minor level: 169.54

The GLD closed at 183.75. Watch the major 184.38 level. The GLD is above the upper band on the daily chart.

The upper band is 178.24. A would expect a pullback.

Watch the 183.60 level on the downside.

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 36.91. At this point, the XLE will need two closes above 38.28 to move higher.

To move lower, the XLE will need two closes under 36.72.

The 37 area should be support.

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 373.01. Apple closed $6.23 lower.

On the upside watch the 375 level. And two closes under 371.88 and Apple should drop to 362.

Apple is oversold and I expect a bounce.

WATCH LIST:

Bullish Stocks: ISRG, GWW, HD, WST, TWLO, BABA, PANW, LIN, RMD, LH, MKC, CMI, FFIV, TTWO, KMB, TSCO, MUSA, GNRC, CHKP, DQ

Bearish Stocks: STZ, BA, ADP, VMW, CBOE, ADC, VFC, PLNT, WBA, CZR