July 31, 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, I suggested a debit spread on CTXS. The suggestion traded the August monthly options and therefore, risk was limited to 1% of the portfolio.

The S & P 500 ended the day closing 12.22 points lower. The S & P closed out at 3,246.22.

And the range for the day was 46.79 points. The range was almost the daily average true range.

The daily average true range is 47.39 points, so yesterday's range almost hit the average.

And the day closed out at 90% of the range of the daily bar. This does suggest we will see the high of 3,250.92 violated before the low of 3,204.13.

This was a relatively bullish day considering that the S & P opened with a bearish gap of 26.68 points.

The low for the day was about one point above a minor level, which is 3,203.08. And the S & P managed to close above back above the minor 3,242.15 level.

Support from yesterday's daily bar is in the 3,227 area. Above this level, there is support around 3,239.

Today not only closes out the weekly price bar but the July monthly price bar as well.

I will cover the July monthly price more on Monday. But, the main factor on the monthly chart is the fact that the upper band is 3,216.81. And yesterday, the S & P closed about 30 points above it. So, watch to see if this level holds as support.

As for the weekly price bar, this would be the sixth consecutive week where the range for the week is less than the weekly average true range.

This week's range through yesterday is only 61 points and the average is 150.

The midpoint is 3,234 and yesterday closed 12 points above it. So, watch the midpoint for support. A close above this level would be bullish.

Pre open, the S & P is trading about 19 points higher. This projects to an open around 3,265 or about 15 points above yesterdays high. Watch for support at the high on a pullback.

AMZN is trading about $185 higher after reporting. GOOGL is trading about $9 lower. FB is up about $16. And Apple is trading about $26 higher.

ZEN is trading about $4 lower.

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 24.76. The VIX closed .66 points higher for the day.

The VIX closed again under the 25 level.

And the VIX continues to trade around the midband on the daily chart. That price level is now 24.96. And this is right around the major 25 level, which should be resistance.

Watch how it trades around the midband. A break under the midband and expect the market to continue higher.

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 3,246.22. Watch the minor 3,242.15 level. This level should now be support.

The upside objective should be the 3,281.20 level.

Technical support is around 3,240.

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
Minor level: 254.69
Minor level: 251.56
Major level: 250.00

The QQQ closed at 261.13. The QQQ closed 1.36 points higher on the day.

Support should be at the 260.93 level. Look for a move above 262.50.

Support is still in the 259 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 148.76. This put the IWM above the midband on the daily chart, which should now be support. That price level is 145.81.

To move higher, the IWM will need to clear 150.

The minor 148.44 level should be support. And 147 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 171.11, closing 1.12 higher. 171.88 should still be the objective.

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 now technical support.

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 183.76. Watch the major 184.38 level. The GLD is above the upper band on the daily chart.

The upper band is 179.48. A would expect a pullback.

The GLD will need two closes under 183.60 to head lower.

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 36.20. At this point, the XLE will need two closes above 38.28 to move higher. And if the XLE closed under 36.72 today, it should drop to 34.37.

The 38 area should be resistance.

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 384.76. Apple closed $4.60 higher.

Apple is trading about $25 higher after reporting. If should open around $409. Watch for support at $400 on a pullback.

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