June 23, 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 a debit spread on BMY yesterday. The trade was to buy the $57 call
and sell the $63 call against that position. The expiration date is July 24th.

Yesterday, the S & P 500 ended the week closing 20.12 points higher. The S & P 500 closed out at 3,117.86.

The market gapped down at the open and dropped to a low of 3,079.39, before rallying the balance of the day.

The low of 3,079.39 took out Friday's low of 3,083.11 by 3.72 points.

This satisfied the close percentage of 20% from Friday, where the odds favored making a new low before a new high.

The low of the day was made right after the open, at 9:30 EST. After putting in the low, the market rallied all day to hit a high of 3,120.92 at 3:11 EST.

I mentioned this because yesterday I wrote about the fact that the market projects to make a new low.

And I mentioned that the resistance level from Friday's daily price bar was around 3,119. As it happened, the market rallied back to a high of 3,120.92, or within two points of the resistance level.

You have probably noticed by now how these support and resistance levels become price objective for the market. Almost like how the extreme bollinger band settings become price objectives.

We also know that the close percentage from last week's weekly price bar is 70%, so the odds favor last week's high to be violated for the low.

Pre open, the S & P is trading about 36 points higher. This projects to an open around 3,153.

Last week's high was 3,155.53, so it should be tested today. If the market can clear last week's high, it should be support.

Watch both price levels for a breakout or a breakdown.

The support level from yesterday's daily price bar is in the 3,100 to 3,106 area.

Earnings season is winding down, so there are not a lot of companies reporting this week.

NKE reports Thursday after the close.

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 31.77. It closed 3.35 lower on the day. It was down 9.54% lower.

Look for a move down to 31.25. And technical support is at 30.88.

Watch to see if the VIX breaks under the 31 area. If it does, look for it to continue lower.

Technical resistance is around 33.

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 3,117.86. Watch the minor 3,164 level. Two closes above this level and the S & P should test 3,281.20.

Support should be at the major 3,125 level.

Technical support is around 3,097.

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 246.74. A close today above 245.31 and the QQQ should test 250.

The minor 245.31 level should be support. Technical support is at 245.

The upper band is now 250. This is right at the next major 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 <
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 142.40. The IWM did manage to close above the 142.19 level. This level should be minor support.

With an open above 143.75, look for this level to be support.

The key on the upside is the midband, which is 146.77. This will be the third test of the midband. If the IWM can clear it, then it would be support.

141 should be technical support.

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 162.41. Yesterday's high went to 163.42, taking out the major level.

The TLT will need to close above 162.50 to head higher. If it can't, look for a move lower.

The TLT is in a downtrend on the 60 minute chart. Resistance should be at the 163 level, which is the midband. If the TLT can clear this level, it should be support.

GLD:

Major level: 168.76
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 165.09. The GLD hit a high of 165.73, taking out the objective.

Watch to see if the GLD can close above the 166.41 level. If it can, a test of 168.76 should be the next move.

Technical support is also at 163. A break under this level the GLD should continue lower. But, it should be support.

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 39.25. The XLE needs to close above 39.83 to move higher.

The midband on the 60 minute chart is now 39 and the XLE is just above it. This should now be support. A break under it and the XLE should head lower.

The 37.50 area should be support.

AAPL:

Major level: 362.50
Minor level: 359.38
Minor level: 353.13 **
Major level: 350.00 < HIT
Minor level: 346.88
Minor level: 340.63
Major level: 337.50
Minor level: 334.38
Minor level: 328.13
Major level: 325.00
Minor level: 321.88
Minor level: 315.63
Major level: 312.50

Apple closed at 358.87. Looking for a move up to 362.50. And 353 should be support.

Technical support is right at the 353 area as well.

WATCH LIST:

Bullish Stocks: AMZN, TSLA, SHOP, REGN, ADBE, NTES, NVDA, ASML, AAPL, PAYC, COUP, ZM, ADSK, BABA, QDEL, TWLO, ZM, CRM, EFX, PYPL, DOCU

Bearish Stocks: LH, RGLD, HAE, SAIC, DOX, AMBA, FLIR, AVA, FSCT, CMTL