May 28, 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.

Just as it seemed the market would begin a pullback, it found support and managed to rally to make a new high.

The market gapped up at the open 23.88 points. After stopping at 3,021.72 right at the open, the market sold off to a low of 2,969.75.

From there, the market rallied to a high of 3,036.25.

The range for the day ended up at 66.50 points. This was double the range from Tuesday. And it was right at the daily average true range, which is 66.27 points.

A couple of points from yesterday.

The low for the day stopped right at the major 2,968.80 level. Actually, it stalled about a point above the level we suggested should be support.

As you know, once a major level is violated, it should act as support.

The low for the day dropped under the midband, but the market was able to successfully close above it. The midband is now 2,985.42.

So, the market actually dropped about 16 points below the midband before being able to recoup it.

This level should be support.

The final comment is that this was the first close above 3,007.85. This level should also be support.

Support from yesterday's daily bar should be around 3,025.

And the daily bar closed at 100% of the range for the day. This does suggest that yesterday's high should be violated.

WDAY reported and is trading about 8.60 higher. ADSK reported and is trading about $5 lower.

This afternoon we hear from COST, CRM, and ULTA.

Here are the Key Levels for the Markets:

$VIX:

Minor level: 39.84
Minor level: 38.28
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 < Hit
Minor level: 27.35
Minor level: 25.78
Major level: 25.00

The VIX closed at 27.62. The VIX closed .39 points lower yesterday. And it was the second close under 28.13.

At this point, the next level to the downside is 27.35. Two closes under this level and the VIX should drop to 25.

The minor 28.91 level should be resistance.

Technical resistance is around 28.

S & P 500:

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
Minor level: 2,617.25
Minor level: 2,539.06
Major level: 2,500.00

The S & P closed at 3,036.13. This was the first close above 3,007.85. This now suggests that this level should be support. And if the S & P can close above 3,007.85 today, it should head up to 3,125.

Support is also at the major 2,968 level.

There is technical support right around the 3,007 level.

QQQ:

Major level: 237.47
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
Minor level: 217.19
Minor level: 214.06
Major level: 212.50
Minor level: 210.93

The QQQ closed at 230.29. We were looking for the QQQ to regain the 229.77 level yesterday and it managed to do that.

But, to move higher at this point, the QQQ needs to clear 231.22.

The 229 area should be techncial support.

And 227 should be support from yesterday's daily bar.

IWM:

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
Minor level: 129.69
Minor level: 126.56
Major level: 125.00
Minor level: 123.44
Minor level: 120.31
Major level: 118.75

The IWM closed at 143.09. Yesterday was the first close above 139.06, so if the IWM can close above it today, it should head up to 143.75.

142.19 should be support, along with the major 137.50 level.

The 140 area should be technical support.

TLT:

Major level: 168.75
Minor level: 167.97
Minor level: 166.41
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: 155.48

The TLT closed at 162.02. We were looking for a move to 162.50. And the TLT closed under it for the first time.

At this point, if the TLT has two closes under 161.72 it should drop to 159.

The TLT is in a downtrend on the 60 minute chart. Resistance on that TLT timeframe is now around 164.

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
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 161.18. With a close today under 161.72, the GLD should drop to 159.38. And that's what we got.

163.28 should be resistance. And 162.50 as well.

Technical support is around 160. Watch this level. If the GLD drops under this level it should head lower.

And technical resistance is right around 162.50.

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 40.06. The objective for the XLE should now be up to 40.63. And the XLE is within one point of it.

The major 37.50 level should be support. And the minor 39.83 should also be support.

Technical support should be around 39.

AAPL:

Major level: 325.00
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
Minor level: 284.38
Minor level: 278.13
Major level: 275.00

Apple closed at 318.11. The objective for Apple should be up to 325.

The minor 315.63 level should be support.

The 317 area should now be technical support. Watch to see if Apple can hold this level today. If it can, it should head higher.

WATCH LIST:

Bullish Stocks: AMZN, GOOGL, SHOP, TSLA, ADBE, DPZ, NVDA, AAPL, LULU, COUP, ADSK, SPLK, MSFT, CRM. EHTH, DOCU, PYPL

Bearish Stocks: PG, PGR, TRI, ORCL, BCE, MDLZ, FTS, TAP