May 7, 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.

The S & P 500 ended the day pulling back a bit. For the day, the market closed 20.02 points lower. The day closed out at 2,848.42.

But, with the 14% close percentage on Tuesday, we were expecting Tuesday's low to be violated before the high. And that is precisely what happened.

The market opened 14.70 points above Tuesday's close and 15 points below the high.

From that point, the market sold off all day to close around the low, which was 2,847.65.

And day closed at 2% of the range of the daily bar.

This does suggest that the low should be violated before the high.

But, pre market, the S & P is trading about 35 points higher.

Assuming this trading holds up through the open, the market should open about 7 points below yesterday's high.

Watch the high on a rally. If the market can take out the high, I would expect the price to head higher.

The support area from yesterday's daily price bar is in the 2,865 to 2,869 area.

2,877 is also a support level. And assuming an open above this level, I would expect it to be support on a pullback.

The intraday range was 43.46 points. This is still below the daily average true range, which is now 79.61 points.

Watch the upside resistance levels.

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 2,934. And finally, here is the midband, which is 2,982.

TWLO reported and is trading $31 higher. This is a move of about 25%.

ETSY is trading about $3 lower.

This 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 34.12. It closed 0.51 points higher on the day. The high for the day was 35.69 or 53 cents above the minor 35.16 level.

But, the VIX did manage to close back under the major 34.38 level.

The minor 35.16 and 36.72 level should still be resistance.

The 34 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 2,848.42. The S & P will still need two closes above 2,851.65 to move to 2,968.80.

The S & P should open above the minor 2,851.65 level, so it should still be support.

Technical support is around 2,860. And if the S & P can hold 2,860, look for it to move higher.

QQQ:

Major level: 224.98
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
Minor level: 207.81
Major level: 206.25
Minor level: 204.69
Minor level: 201.56

The QQQ closed at 219. The QQQ had its first close above the major 218.75 level. This level should be support.

Look for support at the minor 217.19 level.

The next minor level is 220.31.

Technical support should also be around 217. 224 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 125.72. If the IWM can close above 126.56 today, it should make a run to 131. It still needs to clear 126.56 to move higher.

Technical support is around 123. And the 129 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 163.41. The TLT did take out the 161.50 level.

At this point, minor resistance should be at 164.85. And look to see how the TLT reacts around 164.85 on a rally.

The 165 area should be technical resistance. And support is around 161.

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 158.95. The next minor level on the upside is 160.16. And on the downside, the level is 158.60.
And the GLD had its first close under the major 159.38 level. This level should be resistance.

Support should be at 157. And technical resistance is around 160.

The GLD is starting to top out.

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 36.15. If the XLE can clear the major 37.50 level, it should be support. But, it has now had its first close under 36.72. A close today under this level and it should drop to 34.

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 31. And resistance at the 42 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 300.63. Apple held the 300 level.

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

298 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