June 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 CLVS short $7.50 call expired on Friday with the stock settling under the strike price. This now brings the premium collected on the position to 50 cents per share.

I will look to sell more calls this week on a bounce. Especially with this week being a short week.

As a reminder, all markets will be closed this coming Friday in celebration of July 4th.

The week closed out with the S & P 500 selling off 74.71 points. The S & P closed at 3,009.05 on Friday.

The daily range on Friday was 69.10 points, which was slightly greater than the daily average true range, which is now 66.63 points.

I mentioned this again because it seems like the daily moves are extreme, but in reality, they are what the market has been averaging.

In fact, the S & P 500 has averaged a daily range greater than 50 points since February 27th.

The key for Friday was that the S & P held just above the midband on the daily chart.

Fridays low stopped at 3,004.63 which was 1.19 points under the midband, which is now 3,005.82.

However, the S & P managed to close just above the midband.

This, of course, is the key level at the moment. Watch to see if this holds. If it can't, I would expect a further sell-off.

The daily price bar closed at 6% of the range of the bar. This does suggest that Friday's low of 3,004.63 should be violated before the high of 3,073.73.

The resistance area from Friday's daily bar is in the 3,039 to 3,041 area.

For the week, the S & P closed 88.69 points lower. And the weekly price bar formed an inside bar, with a lower high and higher low.

And it contracted as well. The range for the week was 150.27, which was about 25 points less than the weekly average true range, which is 174 points.

The resistance level from last week's weekly bar is around 3,080. And there is a resistance level around 3,052.

The short term 60 minute chart still remains bullish. Resistance from that timeframe is around 3,031. The S & P will need to clear this level to head higher.

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 34.73. It closed .39 lower on the day. By closing above the minor 33.60 level, it should now be support.

And the VIX would still need two closes under the 33.60 level to head lower.

The VIX managed to close above the major 34.38 level. This also helps to confirm that the minor 33.60 level should be support.

Technical support on the VIX 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 3,009.05. As I mentioned above, the midband is the key level to watch, along with the minor 3,007.85 level.

A close today above 3,007.85 and I would expect a run-up to 3125.

Pre open, the S & P is trading about 12 points higher. This projects to an open around 3,021.

Technical support is around 3,00.

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 240.22. This put the QQQ under the minor 242.15 level. A close today under this level and the QQQ should drop to 237.50.

The QQQ would need to reclaim 242.15 to move higher.

The resistance level from yesterday's daily bar is around 243.

And technical support is around 237 as well.

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 136.67. The IWM closed just under the major 137.50 level.

To move lower, the IWM needs two closes under 135.94.

Technical resistance is at 138. If the IWM cannot clear this level, it should head lower.

Technical support is around 35.

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 165.25. Friday's high was 31 cents under the 165.63 objective.

Watch to see if the TLT can clear 165.63. If it can't, I would expect it to drop.

Support is still around 162, which is the midband on the 60 minute chart.

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 166.54. Friday was the first close above 166.41. A close today above this level and the GLD should test 168.75.

The upper band is 167.50 on the 60 minute chart. The GLD sold off from the upper band and is making another run at it.

Support should be at 165.

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 36.51. The XLE closed under the minor 36.72 level. A close today under it and the XLE should drop to 34.

Watch the 36.72 level today. To head higher, the XLE needs to recoup this level.

The midband on the 60 minute chart is now 39 and the XLE is below it. This should now be resistance. This level is 39 and the XLE will need to clear it to head higher.

The 35 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 353.63. With a close under 359.38, Apple should drop to 350.

Best strategy is still to buy oversold conditions off short term charts. Technical support is around 345.

WATCH LIST:

Bullish Stocks: AMZN, MELI, SHOP, NTES, AAPL, RNG, COUP, SPOT, ZM, WIX, VEEV, HUBS, TWLO, SPLK, DOCU, ALNY, WING, EA

Bearish Stocks: LMT, NOC, COST, INTU, APD, BDX, PANW, ANET, VRSN, JAZZ, CHKP, KEYS, CYBR, HCA