October 21, 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.

The market managed to make a small bounce yesterday. The S & P 500 ended the day closing 16.20 points higher.

The day closed out at 3,443.12.

Of course, yesterday contracted. But, after a long range day, this is generally expected.

The range for the day was only 41.28 points. This was 75% of the daily average true range, which now reads 55.06.

And the day ended up as an inside day, with a lower high and a higher low.

With the inside day, we need to monitor the high and the low. Yesterday's high was 3,476.93 and the low was 3,435.65.

Usually, price will continue to move in the direction of the violation.

The other key level to watch from yesterday was the close, which was 3,443.12.

Finally, on the upside the midpoint from Monday's long range candle should also be a key level to monitor. That price level is around 3,460.

On the downside, the monthly level of 3,400 is a key support level. This level should still be a key support level with the market trading above it.

The other longer term level to watch is last week's low, which is 3,440.89.

The market managed to close just above the low, so watch this level again today. If the market can hold the 3,440.89 level, it could make a run-up to 3,483.81.

Pre open, the S & P is trading about 4 points higher. This projects to an open around 3,447.

On the downside, watch the close of 3,443.12 and on the upside, watch the 3,461 area.

NFLX reported last night and is trading about $28 lower. SNAP reported and is trading $6 higher.

This afternoon after the close, we get earnings from CMG and TSLA.

And the week ends with AMZN reporting Thursday after the close, along with INTC.

Here are the Key Levels for the Markets:

$VIX:

Minor level: 32.03
Major level: 31.25
Minor level: 30.47
Minor level: 28.91
Major level: 28.13 <
Minor level: 27.35
Minor level: 25.78
Major level: 25.00
Minor level: 24.22
Minor level: 22.66
Major level: 21.88
Minor level: 21.10

The VIX closed at 29.35. The VIX closed .17 point higher. Watch the 28.91 level today.

A break under this level and the VIX should head lower. If it can hold, then the VIX should head higher.

It is now back above the midband, which is 26.83 and should now be support.

The minor technical level is 29. Watch this level today.

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 3,443.12. After closing under the major 3,437.40 level, the market managed to close back above it.

Watch the minor 3,398.35 level on the downside again. It should be support. And two closes under this level and the S & P should drop to 3,281.

Technical support is right at 3,404. With the 60 minute chart crossing into a bull trend, I would expect a rally. This is the midband on the 60 and I would expect this level to hold.

If it can't, I would expect lower prices to follow.

QQQ:

Major level: 300.00
Minor level: 298.44
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

The QQQ closed at 284.41. The QQQ closed .61 higher. The QQQ dropped to 14 cents above the minor 282.81 level.

But it did close under the 285.94 level. Look for the QQQ to reclaims this level today. If it can't, then a drop to 281.25 is possible.

Daily support is around 285.

The 289.06 should now be resistance.

Like the S & P, the QQQ crossed into an uptrend on its 60 minute chart. And the midband is 280.30 and should be support.

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 160.76. The IWM closed .35 lower on the day.

Watch the 160.94 level today. The IWM needs to recoup this level to head higher.

The IWM has already crossed into an uptrend on the 60 minute chart. 154 is 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 < HIT
Minor level: 158.60
Minor level: 157.03
Major level: 156.25

The TLT closed at 159.25. It closed 1.53 lower.

The TLT did hit the 159.38 objective and closed under it. The next minor level is 158.60.

A break under 158.60 and the TLT could drop to 156.25.

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 179.25. The GLD closed .86 higher on the day.

The key at the moment is 180.47. If the GLD cannot recoup this level, it should drop to 175.

After trading right on the midband on the 60 minute chart, the GLD broke and closed under it. This level should still be resistance. The midband is 180 and should be resistance.

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 HIT
Minor level: 30.47
Minor level: 28.90 **
Major level: 28.12

The XLE closed at 29.90. The XLE closed .35 higher. If the XLE cannot recoup 30.47, it should drop to 28.

Watch the 30.47 level today.

The 27.00 area should be technical 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 117.51. Apple closed $1.53 higher.

Watch the minor 115.63 level today. If Apple can hold this level, it should head up to 125.

Apple took out the midband on the 60 minute chart. This level is 116.67 and should now be support.

WATCH LIST:

Bullish Stocks: MELI, ZM, NOW, ROP, RH, POOL, CTAS, ALGN, COUP, FDX, DE, DOCU, WDAY, ADSK, MCD, VRSK, PYPL, BAND, TSCO, ETSY

Bearish Stocks: NOC, LHX, CBOE, MRK, RCL, CPA, VLO, CF, LYFT