June 24, 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, you should have sold the $7.50 call that expires this Friday on CLVS.

This brings the call premium collected on this position to $.50 per share.

Yesterday, the S & P 500 ended closing 13.43 points higher. The S & P 500 closed out at 3,131.29.

The market opened yesterday with a massive bullish gap open of 40.96 points.

The S & P 500 opened at 3,138.70 and ran to a high of 3,154.90. After hitting the top at just before 2:00 EST, the market gave back 23.61 points to close at 3,131.29.

As a result of this action, the S & P closed at 15% of the range of the daily price bar.

This puts the odds of violating yesterday's low before the high at around 85%.

And pre open, the S & P is trading about 21 points lower. This projects to an open around 3,110. Assuming this trading holds up through the open, the market would open about 10 points below the high from Monday, which was 3,120.92.

This would mean that the close percentage should be satisfied at the open. And that the open gap would be filled.

Usually, these large gaps have a difficult time following through to the upside. And a lot of times, they are a great spot to book profits.

The last significant gap was on June 16th when the S & P gapped 89.69 points higher at the open. For the next two days, the market essentially pulled back.

So, a pullback after a large bullish gap is not unusual.

The question is where should support be?

The projected open would be about 15 points under the major 3,125 level. There is a minor support level at 3,105.

You want to see if the market can hold 3,105. If it can't, it should head lower.

3,079 is the last pivot low on the 60 minute chart, which should be a support level.

If this level cannot hold, the next major level of technical support is around 3,015.

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 31.37. It closed 0.40 lower on the day. The low for the day of 29.98, broke under the minor 30.47 level.

At this point, the key levels are the minor 30.47 and 32.03 levels. If the VIX closes above the minor 32.03 level, it should test 34.38.

The midband on the 60 minute chart is 30.81 and the VIX dropped under it before being able to rally and close just above it. This level should be support. So, a break under it and the VIX should drop.

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

On the upside, there is technical resistance at 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 3,131.29. Watch the minor 3,164 level. Two closes above this level and the S & P should test 3,281.20. And now, watch the minor 3,085.95 level on the downside.

Support should be at the major 3,125 level.

Technical support is around 3,110. And also at around 3,050.

QQQ:

Major level: 256.24
Minor level: 265.68
Minor level: 251.56
Major level: 250.00 HIT
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 248.84. The QQQ hit the 250 objective. The high for the day was 251.15. But, the QQQ closed under the major objective.

Two closes under 248.54 and the QQQ should drop to 243.75.

The QQQ is overbought. It is right up against the upper band on the daily chart. The upper band is 250.78, so the QQQ was able to clear it, but could not close above it.

Technical support is around 244.

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. The IWM managed to clear 143.75, but could not close above it.

At this point, watch the minor 142.19 level. Two closes under this level, the IWM should drop to 137.

The key on the upside is the midband, which is 146.73. This will be the third test of the midband. If the IWM can clear it, then it would be support.

Technical support is still around 141.

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 161.30. This was the first close under 161.72. A close today under this level would suggest a drop to 159.38.

The TLT will need to close above 161.72 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 162.50level, which is the midband. If the TLT can clear this level, it should be support.

Starting to look like we will see the next leg lower.

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 166.48. This was the first close above 166.41. A close today above 166.41, and the GLD should test 168.75.

The upper band is 171 and it appears a test is very likely.

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

The GLD is against the upper band on the 60 minute chart. That price level is 167. Short term the GLD is overbought.

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 39.29. The XLE needs to close above 39.83 to move higher. This level should now be resistance.

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: 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 366.53. Apple hit the 362.50 level we were looking for. And it managed to close above the minor 365.63 level.

A close today above this level would project to a move up to 375. A close under it and expect Apple to pullback.

Support should be at the 359.38 level. Technical support is around 355.

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