June 9, 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 two new positions. The first was a weekly covered call on CLVS. The idea was to buy CLVS and sell the $7.50 call that expires this Friday.

The second position was a short term debit spread on MKC. Risk is limited on this position.

Yesterday saw the S & P 500 follow through after the long-range candle from Friday. The day closed out 38.46 points higher.

Monday closed out at 3,232.39. And the day closed at the high of the day, which was 3,233.13.

And the daily bar closed at 98% of the range of the day.

This does suggest that yesterday's high of 3,233.13 should be violated before the low, which was 3,196.00.

And the support area from yesterday should be in the 3,214 to 3,216 area.

Yesterday also took out last week's high of 3,211.72. So, this satisfied the closing percentage projection from last week.

So, watch the weekly support area of 3,116 to 3,122 on a pullback.

Pre open the S & P is trading about 27 points lower.

This would project to an open around 3,205 of about 9 points above yesterday's daily high.

Watch to see if yesterday's low of 3,196.00 holds as support.

The market is overbought in the short term.

We know this for two reasons. The bullish percent index is reading 91.20 percent. This of course is overbought as I have been writing about.

The second reason is that the S & P is now trading above the upper band on the 60 minute chart.

The upper band is 3,222.82 and yesterday's close is about 11 points above the upper band.

The fact that the market had the strength to clear the upper band tells us two things.

The first is that it is overbought. And the second is that there should be a retest of the upper band after dropping inside the bands.

CASY reported last night and is trading about $9.50 lower. COUP also reported and is trading about $9 lower.

Thursday, after the close, we get earnings from ADBE and LULU.

Here are the Key Levels for the Markets:

$VIX:

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 25.81. The VIX closed 1.29 points higher. This completely erases the loss from Friday.

This also put the VIX above the minor 25.78 level. A close today above 25.78 and the VIX should head up to 28.13.

The key at the moment is the midand on the daily chart. The midband is now 22.71 and yesterday the VIX began to move away from it.

As you know, the VIX cleared the upper band and now has dropped to retest the midband. If the VIX clears 29 area, it could continue higher.

But, the resistance levels should help us to confirm the objectives for the VIX.

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 3,232.39. With a close above 3,164.00, the objective for the S & P should be up to 3,281.20.

At this point, support should be at the minor 3,164 level. Also, there is a minor support level at 3,203. Watch how the market reacts at this level.

The 3,125 level should be support.

The first level of technical support right around the 3,176 level. And the
S & P could drop to as low as 2,935 and the uptrend would still be intact.

QQQ:

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
Minor level: 229.66
Minor level: 226.56
Major level: 225.00
Minor level: 223.42
Minor level: 220.31
Major level: 218.75

The QQQ closed at 241.55. Yesterday was the second close above 239. This does suggest that the objective should be to 243.75.

And 244.87 is the upper band on the daily chart.

On the downside, the major 237.50 level should be support.

The 238 area should be techncial support.

And 240 area should be support from yesterday's daily bar.

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 153.09. Yesterday was the first close above 151.56 for the IWM. A close today above it and the IWM should test 156.25.

The midband is 147.59, which should now be support.

And the minor 151.56 level should also be support.

The 150 area should now 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 Hit
Minor level: 155.47
Minor level: 153.91
Major level: 153.13

The TLT closed at 156.71. The TLT closed above the 157.03 level. A close today above 157.03 today and the TLT should test 159.38.

To move lower, the TLT would need to close back below 155.47.

The TLT is in a downtrend on the 60 minute chart. Resistance on that timeframe is now around 160.

The TLT is oversold and a bounce should be coming. Technical support is around 155.

GLD:

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 Hit
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 GLD closed at 159.72. The GLD closed back above 159.38. Watch the minor 160.16. Two closes above this level and the GLD should head up to 162.50.

The major 158.60 level should be support.

Technical resistance is now around 161. Watch to see if the GLD can clear this level.

XLE:

Minor level: 47.65
Major level: 46.88 HIY
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 46.86. Yesterday's high was exactly 46.88, which also just happened to be the objective.

43.75 should be support. And the minor 44.53 level should also be support.

And technical support should be around 44.

Like the S & P, in the short term, the XLE is overbought. It is above the upper band on the 60 minute chart. That level is 45.43.

AAPL:

Major level: 337.50
Minor level: 334.38
Minor level: 328.13 **
Major level: 325.00 HIT
Minor level: 321.88
Minor level: 315.63
Major level: 312.50
Minor level: 309.38
Minor level: 303.13
Major level: 300.00
Minor level: 296.88
Minor level: 290.63
Major level: 287.50

Apple closed at 333.46. Apple closed $1.96 higher for the day.

Apple did close above 328,13, so the objective should be to 337.50.

The minor 328.13 level should be support. And the major 325 level also offer support.

And technical support is around the 328 area.

WATCH LIST:

Bullish Stocks: GOOGL, TSLA, CMG, NTES, ASML, NVDA, AAPL, PAYC, LULU, LRCX, FB, ADSK, BABA, KLAC, ZM, SPOT, SWKS

Bearish Stocks: BDX, VRSN, SAFM, ROKU, AEM, THS, PFE, FGEN