May 6, 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 another weekly covered call on HOG yesterday. The idea was to buy HOG and sell the $22 call that expires this week.

The S & P 500 ended the day closing 25.70 points higher. The day closed out at 2,868.44.

The day closed at only 14% of the range of the daily bar. This suggests that the low of 2,863.55 should be violated before the high of 2,898.23.

And pre open, the S & P is trading about 15 points higher.

This projects to an open of 2,883. This would put the open to just above the midpoint of 2,880. Watch to see if the market can hold the midpoint.

If the S & P cannot hold the midpoint, I would expect a test of the close, which is 2,868.44.

The intraday range was only 34.68 points. If you add in the range from yesterday's low to Monday's high, it totals 54 points.

Even this range is 65% of the daily average true range, which is 82.55 points.

The intraday range was only 42% of the daily average true range.

I bring this up because we have now had multiple contractions which leads ultimately to a range expansion.

There are still a few areas of overhead resistance.

The first is the weekly level of 2,888. Watch this level on a move higher.

And there is still the 61.8% retracement level, which is 2,834. And finally here is the midband, which is 2,982.

SHOP reported and is trading about $12 lower. BYND also reported and is trading about $9 higher.

This 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 33.61. The VIX closed one cent above the minor 33.60 level. At this point, I would expect resistance at 34.38 and the minor 35.16 level.

The VIX did drop to under 34.38 as we expected.

The 35 area should be technical resistance.

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

The S & P closed at 2,868.74. Yesterday was the first close above 2,851.65. A close today above 2,851.65 and the S & P should test 2,968.80.

And at this point, the minor 2,851 level should be support.

Technical support is around 2,850 as well. And if the S & P can hold 2,850, look for it to move higher.

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 217.66. The QQQ took out 218.75 yesterday, getting as high as 220.14.

Look for support at the minor 217.19 level and at 214.06.

Technical support should also be around 216. 222 is 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 126.65. If the IWM can close above 126.56 today, it should make a run to 131.

Technical support is around 123. And the 128 area is technical resistance.

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 166.09. The TLT did drop to 165.63, as expected. The low for the day was 165.27.

At this point, minor resistanc should be at 166.41. And look to see how the TLT reacts around 164.85.

The 168 area should be technical resistance. And support is around 164.

The TLT has topped out in the short term.

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 161.02. The next minor level on the upside is 160.16. And yesterday was the first close above it. A close today above it and the GLD should test 162.50.

If the GLD cannot hold the minor 160.16 level, I would expect it to drop.

Support should be at 160. And technical resistance is around 163.

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 37.12. If the XLE can clear the major 37.50 level, it should be support.

And if the XLE has two closes above 38.28, it should move up to 40.63. But, the XLE needs to hold 36.72. If it can't, it could pull back.

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 35. 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 297.56. Apple did hit 300 yesterday. The high yesterday was 301.

At this point, the minor 296.88 level should be support.

293 should offer technical support. And technical resistance is around 304.

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