June 25, 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 market sold off hard yesterday. For the day, the S & P 500 closed 80.96 points lower. The day closed out at 3,050.33.

The sell-off put the market right in the middle of the weekly support area, which is between 3,045 to 3,060.

So, you want to watch these levels today. Especially, the lower end of 3,045.

The other key level today is midband on the daily chart, which is 3,005.28.

With the S & P managing to clear this level, it should be support. So, watch to see if it can hold. If it can't, this may be the beginning of a bigger pullback.

Yesterday's daily bar closed at only 22% of the range of the daily bar, which does suggest the low should be violated.

This morning, the S & P did take out yesterday's low, so that has been satisfied.

And the resistance level from yesterday's daily bar is in the 3,073 to 3,082 area.

Yesterday's range was 82.88 points. This does qualify as a long-range candle. And I know it seems like an outsized range, but when you consider the fact that the daily average true range is 66 points, it is really not out of the ordinary.

It was 126% of the daily average true range.

The question for us is there's a way to predict when a range expansion will come?

We know that when the ranges contract, we will see an expansion. The question is when.

Yesterday's expansion followed two days where the ranges contracted. I define a contraction as a daily range less than the daily average true range.

So, these contractions put us on notice that an expansion should be coming. And certainly, that happened yesterday.

NKE reports this afternoon 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 33.84. It closed 2.47 higher on the day. The high for the day was 37.12. It could not take out the 37.50 level, which should be resistance

Watch this level today. A break above it and the VIX should head higher. A failure, and look for a move lower.

On the upside, there is technical resistance at around 37.

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 3,050.33. This put the market under the minor 3,085.95 level.

A close today under this level and the S & P should test 2,968.

Watch the 3,086 level on a rally.

Technical support is around 3,030.

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 243.71. The QQQ dropped to the major 243.75 level.

The QQQ dropped one level yesterday. Watch the minor 245.31 level, a close today above this level would suggest the QQQ will bounce.

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.

The 246 area is resistance from yesterday.

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 138.36. The major 137.50 level should be support.

139.06 is minor level to watch on the upside. Two closes above this level and the IWM should head up to 143.

The key on the upside is the midband, which is 146.64.

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 163.03. Watch the minor 163.28 level. Two closes above this level and the TLT should head up to 165.63.

The TLT is in a downtrend on the 60 minute chart. But, the TLT managed to close above the midband, which should now be support. The midband is 162.38.

GLD:

Major level: 168.75
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 165.90. Watch to see if the GLD can hold the major 165.73 level. If it can't, look for the GLD to pullback.

The upper band is 167 on the 60 minute chart and the GLD is pulling back from it.

Support should be at 162.

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 37.11. Watch to see if the XLE can reclaim the major 37.50 level.

The midband on the 60 minute chart is now 39 and the XLE is just below it. This should now be resistance.

36.72 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 360.06. The minor 359.38 level should be support.

The best strategy is still to buy oversold conditions off short term charts.

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