October 23, 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.

There is one position that expires this afternoon and that is the short $6 call on CLVS. Hold the position and if I suggest an adjustment, you will receive a separate email. If the calls are assigned this afternoon, the total return will be 18.7%.

The S & P 500 ended the day closing 17.93 points higher. The market closed at 3,453.49.

And the day closed at 84% of the range of the daily bar. This does suggest that the high of 3,460.53 should be violated before the low of 3,415.34.

And the support area from yesterday's daily bar is in the 3,446 to 3,438 area.

And the daily range did expand from Tuesday and Wednesday, but it was still less than the daily average daily true range.

The range for the day was 45.19 points. And the daily average true range is 52.82 points.

Pre open, the S & P 500 is trading about 12 points higher.

This projects to an open around 3,465 or about 5 points above yesterdays high, so the high should be taken out right at the open.

Watch the high for support on a pullback.

The weekly range so far is 87 points. The weekly average true range is 128 points. So, for the week, the range is about 41 points below the average.

A key level to watch is the midpoint, which is 3,458.88 and yesterday's close was about 2 points above it.

So, watch the midpoint today.

The market should open above this level. And I would expect support at that level on a pullback.

The weekly high so far is 3,502.42 and I would expect a run to it on a continuation move.

AMZN reported and is trading about $16 higher. INTC reported and is down about $5.50 after reporting.

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 28.15. The VIX closed .50 points lower. The high did clear the 28.91level, but it sold off to close almost on the 28.13 level.

Watch the 28.13 level today. A break under it and the VIX should head lower.

But, watch the midband on the downside. The midband is 27 and should be support.

Also, the technical support level on the 60 minute chart is 27.66. A break under this level and the VIX should head lower.

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 3,453.49. The S & P closed 17.93 points higher.

Support should still be at the major 3,437.40 level. And watch the 3,476.45 level on the upside.

3,465 is minor resistance. If the S & P can clear this level, it should continue higher.

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 284.11. The QQQ closed one cent lower. Watch the 285.94 level again today. The QQQ needs to clear this level to move higher.

Daily support is around 283.

The 289.06 should now be resistance. And 285 should be support.

Like the S & P, the QQQ crossed into an uptrend on its 60 minute chart. And the midband is 280.00 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 162.13. The IWM closed 2.75 higher on the day.

Watch the 162.50 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. 161 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 157.05. It closed 1.65 lower. Look for a move to 156.25.

And watch to see if the TLT can hold the 156.25 level.

The TLT is under the lower band on the 60 minute chart. It is now oversold. Expect a bounce to follow.

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 178.83. The GLD closed 1.77 lower on the day.

Resistance is at 180.47. Look for a move down to 175.

The GLD gapped back below the midband on the 60 minute chart. This level should now be resistance, which is 180. A break under it and the GLD drops.

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: 28.12 <

The XLE closed at 30.54. The XLE closed 1.21 higher. Watch the 31.25 level today.

If the XLE can clear this level, look for it to continue higher.

A close today above 28.90 and the objective is to 31.25.

The 30.00 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 115.75. Apple closed $1.12 lower.

Watch the minor 115.63 level again 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 115.90. If Apple cannot reclaim this level, I would expect it to head lower.

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