November 5, 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.

Yesterday I suggested two trades. The first was an adjustment to a current holding. And that was to sell the November $17.50 call. This brings the premium collected on this position to $1 per share.

The second suggestion was a new position. And that was to buy AA and sell the $14.50 call that expires next Friday.

The election rally continues. For the day, the S & P 500 closed 67.01 points higher.

The day closed out at 3,510.45. This put the market above the minor 3,476.45 level. So, watch this level today. A close above this level and the S & P should head higher.

The intra day range did contract. The daily range was only 43.31 points. This was 65% of the daily average true range. This is a contraction.

And day closed at 57% of the range of the daily bar. This still suggests that yesterday's high should be violated before the low.

And the support area from yesterday's daily bar is in 3,507 area. Under this level, the next support level is around 3,498.

Pre open, the S & P is trading about 33 points lower. This projects to an open around 3,477.

This projects to an open around 3,477 or about 8 points below yesterday's low of 3,485.74.

On a rally, watch the low of 3,485. And on a sell off, watch the 3,453 level. 3,453 would fill the bullish gap.

In looking at the weekly price bar, we see that it is forming a long-range bullish candle.

The range for the week is already 249 points. This is 173% of the weekly average true range.

Most likely, the range for the week is in.

Thursday's close is at 93% of the range of the weekly bar. And the midpoint is 3,404.

75% of the weekly bar would put the weekly close at 3,466. This level projects to be around 11 point below the projected open.

If this is violated, then the market would most likely test the 50% level. These pressure points give you some area to look for support.

Here are the Key Levels for the Markets:

$VIX:

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
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 27.58. The VIX closed 1.99 points lower.

The VIX already took out the 28.13 level and closed under it. Watch this level today.

If the VIX can clear 28.13, it should become support.

The VIX dropped under the midband on the 60 minute chart. This level is 29.10. It should be resistance, so if the VIX clears it, expect to become support.

S & P 500:

Major level: 3,593.60
Minor level: 3,554.55
Minor level: 3,476.45 **
Major level: 3,437.40 <
Minor level: 3,398.35
Minor level: 3,320.25
Major level: 3,281.20
Minor level: 3,242.15
Minor level: 3,164.00
Major level: 3,125.00
Minor level: 3,085.95
Minor level: 3,007.85
Major level: 2,968.80

The S & P closed at 3,510.45. The S & P closed 67.01 points higher. The pre market activity suggests sell pressure.

But, the S & P did close again above the 3,476.45 level. This level should be support. And the objective should be up to 3,593.60.

The 3,452 area should provide technical support.

QQQ:

Minor level: 295.31
Major level: 293.75 <
Minor level: 292.19
Minor level: 289.06
Major level: 287.50
Minor level: 285.94
Minor level: 282.81
Major level: 281.25
Minor level: 279.69
Minor level: 276.56
Major level: 275.00
Minor level: 273.44
Minor level: 270.31
Major level: 268.75

The QQQ closed at 294.39. The QQQ closed 7.48 higher. The QQQ was up 2.61%.

Watch the minor 292.19 level for support.

Support should be at the 285.94 level.

Like the S & P, the QQQ took out the midband on the 60 minute chart. This level should now be support. The midband is 279. And technical support is around 286.

IWM:

Major level: 168.75
Minor level: 167.19
Minor level: 164.06
Major level: 162.50 HIT
Minor level: 160.94
Minor level: 157.81 **
Major level: 156.25
Minor level: 154.70
Minor level: 151.56
Major level: 150.00
Minor level: 148.44
Minor level: 145.31
Major level: 143.75

The IWM closed at 164.91. The IWM closed 4.49 higher on the day.

The IWM did hit the 162.50 level and managed to close above the next minor level of 164.06.

A close today above this level and the IWM should test 168.75.

The midband on the 60 minute chart which is 156 and should now be support.

162 should be technical support.

TLT:

Minor level: 169.53
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

The TLT closed at 161.36. It closed .28 higher. The TLT closed just above the minor 160.16 level again. The TLT should test 162.50.

The TLT is right at the midband on the 60 minute chart. That level is 161.16. If the TLT cannot clear this level, I would expect it to drop. So, watch this level today.

160 should be technical support.

GLD:

Minor level: 188.28
Major level: 187.50
Minor level: 186.72
Minor level: 185.16
Major level: 184.38
Minor level: 183.60
Minor level: 182.03
Major level: 181.25 <
Minor level: 180.47
Minor level: 178.91
Major level: 175.00
Minor level: 174.25
Minor level: 172.70
Major level: 171.89

The GLD closed at 182.93. The GLD closed 4.11 higher on the day.

The GLD will clear the 181.25 level. And a close today above 182.03 and the GLD should head up to 184.38.

The GLD took out the midband on the 60 minute chart. That level is 178.49.
This level should be support.

XLE:

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: 34.37
Minor level: 33.59
Minor level: 32.03
Major level: 31.25 <<
Minor level: 30.47
Minor level: 28.90 **
Major level: 28.13 <

The XLE closed at 29.57. The XLE closed flat on the day.

I expect a move up to 31.25. Having said that, it needs to clear the midband on the 60 minute chart. That level is 30.20. And it starting to look like it is failing.

If it does, expect it to drop.

28.13 should be support.

AAPL:

Minor level: 140.63
Major level: 137.50
Minor level: 134.38
Minor level: 128.13
Major level: 125.00
Minor level: 121.88
Minor level: 115.63 **
Major level: 112.50
Minor level: 109.13
Minor level: 103.13
Major level: 100.00

Apple closed at 119.03. Apple closed $4.08 higher.

Watch the next minor level in the upside, which is 115.63. A close today above this level and Apple should head up to 125.

And look for support at 115.63.

Apple cleared the midband on the 60 minute chart. That level is 114.60 and should now be support.

115 is technical support.

WATCH LIST:

Bullish Stocks: PEN, RMD, FIVN, UTHR, FFIV, XLNX, GRMN, YY, GRMN, PDD, FSLR, JD, BG, SCCO, LSCC, GO, IQ

Bearish Stocks: LMT, NOC, ULTA, BURL, LHX, GPN, CME, BA, ZBH, GD, WEX, DIS, IT, IBM, UHS, MDT, GWRE, FISV, DRI, CBOE, TRU, BAX