May 4, 2020 - MDT Pro Tips A.M.

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.

I did suggest closing out the whole DBX position on Friday. Normally, I would just let the option expire, but I did not like how the stock was reacting.

The sale of the stock was essentially a wash, but with the premium collected on the position, the overall return worked out to 6.6%.

Friday, the S & P 500 closed 81.72 points lower. The intra day range was only 47.48 points, due to the fact that the market had a bear gap open of 43.34.

And the daily bar closed at 19% of the range of the bar. This suggests that Friday's low should be violated before the high.

And pre open, the S & P is trading about 21 points lower. This suggests the market will open around 2,810 or about 10 points below Friday's low of 2,821.61.

So, the close percentage projection should be met at the open.

And recall that the 60 minute chart is still bullish. This does suggest we will see a rally in the market.

For the week, the S & P closed marginally lower. The week closed out 6.03 points lower.

The weekly range contracted for the third consecutive week. The range for the week was only 133.25 points, which was 74% of the weekly average true range of 179.80.

These contractions do suggest we will have an expansion soon.

And for the week, the weekly bar closed at 6.8% of the range of the bar. This also suggests that last week's low should be violated before the high.

And Friday's low was the low for the week, so it should be taken out at the open.

The resistance level from last week's bar should be around 2,843. And above this level is the 2,888 area.

The support area from Friday's daily bar is in the 2,845 area.

Earnings continue this week. This afternoon we get earnings from SWKS. And tomorrow we hear from KLAC and DIS. Wednesday morning, we get earnings from SHOP.

And Wednesday afternoon, we get earnings from ETSY, GRUB, and TWLO.

Thursday afternoon, we hear from FLT, ROKU, OLED, and YELP.

Here are the Key Levels for the Markets:

$VIX:

Major level: 43.75
Minor level: 42.97
Minor level: 41.40
Major level: 40.62
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

The VIX closed at 37.19. The VIX got as high as 39.57 before moving lower to close just under the major 37.50 level.

Watch 37.50 today. If the VIX cannot clear this level, it should head lower.

The two minor levels to watch are 38.38 on the upside and 36.72 on the downside.

Technical resistance is around 42. And support is around 34.

S & P 500:

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
Minor level: 2,460.95
Minor level: 2,382.85
Major level: 2,304.75
Minor level: 2,226.65

The S & P closed at 2,830.71. At this point, watch for support at the major 2,812.50 level.

If 2,812.50 is violated, support should be at the minor 2,773.45 level.

The 60 minute chart is still bullish. And technical support should be around 2,788.

QQQ:

Minor level: 220.31
Major level: 218.75
Minor level: 217.19
Minor level: 214.06
Major level: 212.50 <
Minor level: 210.93
Minor level: 207.81
Major level: 206.25
Minor level: 204.69
Minor level: 201.56

The QQQ closed at 212.74. The QQQ closed just above the major 212.50 level.

Watch the minor 210.93 level. The QQQ would need two closes under this level to head lower.

The 208 area should now be support. And 215 should be resistance.

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

The IWM closed at 125.14. The IWM closed just above the major 125.14 level. At this point, 123.44 should be support.

And I would not expect the IWM to break under the minor 123.44. If it does, it should head lower.

Support should be around the 116.00 area. And technical resistance is at 128.

TLT:

Major level: 169.53
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 167.95. The TLT closed 1.43 points higher. The TLT is selling off from the upper band. That level is now 172.72 and should be resistance.

The next major level is 169.53. Watch to see if the TLT can clear this level.

But resistance should be at 169. The TLT will need to clear this level to head higher. And if it does, it would then be support.

Support should be around 166.

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 159.78. The next minor level on the upside is 160.16. Two closes above this level and the GLD should test 162.50.

Support should be at 157. And technical resistance is around 161.

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 35.85. Look for resistance at 36.72. And if the XLE cannot clear this level, I would expect a test of 34.27.

Like the S & P, the XLE is still in an uptrend on its 60 minute chart. This does suggest we will see another rally.

Technical support should be around 34. And resistance at the 40 level.

AAPL:

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
Minor level: 271.88
Minor level: 265.63
Major level: 262.50

Apple closed at 289.07. Apple needs to clear the 290.63 to head higher.

Watch the minor 284.38 level on the downside and 290.63 on the upside.

Apple has crossed into an uptrend on the 60 minute chart. And the 275 area should be technical support.

Minor resistance is around 293.

WATCH LIST:

Bullish Stocks: GOOGL, HUM, ADBE, DXCM, AAPL, ZBRA, LULU, AGN, MSFT, COUP, CRM, SPOT, SPLK, SWKS, GILD, DVA, CRUS

Bearish Stocks: HE, SCI, SDOW, PSQ, GBDC