May 8, 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.

Yesterday, I suggested closing out the UNFI position at a small loss. The loss was less than 2%.

And there are two short call positions that expire today. The first is the short $8 call on CLVS. And the second is the short $22 call on HOG.

CLVS is in the money and HOG is out of the money.

Hold the positions and if I suggest an adjustment, you will receive a separate email.

Back to the markets.

Yesterday, the S & P 500 closed 32.77 points higher. The day closed out at 2,881.19.

The pre market bullish trading voided the low close percentage from Wednesday. As you recall, Wednesday closed the day at only 2% of the range of the daily bar.

This would suggest that Wednesday's low would be violated before the high.

But, pre market the S & P was trading about 30 points higher.

After gapping higher at the open, the S & P ran to a high of 2,901.92 before dropping to close at 2,881.19.

The range for the day was only 25.44 points. This was about one-third of the daily average true range, which is now 77.89.

And the day closed out at 19% of the range of the daily bar.

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

Having said that, pre market, after the non farm payroll report, the S & P 500 is trading about 34 points higher.

Assuming this trading holds up through the open, the market should open around 2,915 or about 14 points above yesterday's high.

This would suggest that yesterday's high of 2,901.92 should be support on a pullback. Under this level, there is support at 2,889.

2,850 is the midpoint of the weekly price bar through yesterday. So, a close above this level would be bullish.

And watch last week's high of 2,955 on a follow-through.

A close above this level would also be strongly bullish.

ROKU reported and is trading about $11 lower pre open.

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 31.44. The low for the day stopped at 30.47, breaking under the major 31.25 level and the minor 30.47 level.

At this point, a break under 31.44 and it should be resistance. 32.03 should also be resistance.

The 33 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 2,881.19. The S & P will still need two closes above 2,851.65 to move to 2,968.80. And at this point, look for a move to 2,968.80.

And if the S & P can clear 2,929, it should be support.

Technical support is around 2,875. And if the S & P can hold 2,875, 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 221.82. The QQQ had its first close above the minor 220.31 level. This level should be support. And a close today above 220.31 and the QQQ should head up to 224.98.

Look for support at the minor 220.31 level.

Technical support should also be around 218. 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 127.44. At this point, the IWM should make a run up to 131.25.

Technical support is around 123. And the 128 area is technical resistance. It needs to clear 128 to head higher.

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 166.14. The next minor level is 166.41. Two closes above this level and the TLT should head up to 169.53.

The 166.25 area should be technical resistance. The TLT needs to clear this level to head higher. 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 161.39. The next minor level on the upside is 160.16. And on the downside, the level is 158.60.

Support should be at 160. And technical resistance is around 162.

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 37.09. If the XLE can clear the major 37.50 level, it should be support. The XLE got as high as 37.79 yesterday.

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.

It has to clear 37.50 to move higher.

Technical support should be around 37. 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 302.92. Apple held the 300 level.

Next minor level is 303.13. If Apple clears this level, it 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