October 26, 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 short $6 call on CLVS did expire on Friday, with CLVS settling at $5.58. This now brings the premium collected on this position to 15.2% of the cost of the position. I will look to sell more premium this week.

The S & P 500 ended Friday, closing 11.90 points higher. The market closed at 3,465.39.

The S & P made a new high on Friday, as anticipated by the 84% close percentage on Thursday.

The intra day range was only 26.01 points. This was slightly more than half the daily average true range. And the daily price bar closed at 96% of the range of the daily price bar.

This does suggest that Friday's high of 3,466.46 should be violated before the low of 3,440.45.

And the support area from Friday's daily price bar should be around 3,450.

Pre open, the S & P is trading about 34 points lower, based on increase in Covid 19 cases.
This projects to an open around 3,431 or about 9 points below Friday's high. Naturally, the close percentage projection will be wrong and Friday's low should be violated at the open.

This would suggest that Friday's low of 3,440 should be resistance on a rally.

For the week, the S & P closed 18.42 points lower. For the week, the range was 87.08 points.

This was 68% of the weekly average true range, which is 127.98.

This was now the second weekly contraction.

The weekly price bar closed at 57.5% of the range of the weekly price bar. This does give a slight edge to the weekly high of 3,502.42 being violated before the low of 3,415.34.

The projected open should be around 16 points above the weekly low. So, watch the weekly low today on a follow-through to the downside.

The weekly midpoint is 3,459 and should be a level to watch on the upside. On the downside, the monthly level of 3,400 is still a valid support level.

This week we get earnings from a lot of market leaders.

This afternoon, we get earnings from TWLO. And tomorrow morning we hear from CAT and MMM.

Tomorrow afternoon, we get earnings from AMD and MSFT.

Wednesday afternoon, we get earnings from BYND, ETSY, and PEN. And Thursday morning we hear from OSTK, SHOP, WEX, and SPOT.

And after the close on Thursday, we get earnings from GOOGL, AMZN, FB, SHAK, and ZEN.

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 27.55. The VIX closed .56 points lower. It closed again under the major 28.13 level.

Watch the major 28.13 level today. If the VIX can clear it, it would then be support.

Also, the VIX is back at the midband on the daily chart. That level is now 27.05. And Friday's low stopped 21 cents above it.

And the VIX dropped just under the midband on the 60 minute chart. That price is 27.71.

So, the VIX is trading between the two midbands. Stronger weight, of course, is given to the daily level.

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 3,465.39. The S & P closed 11.90 points higher.

Support should still be at the major 3,437.40 level. A break under this level and the S & P should head lower.

Also, support should be at the minor 3,398.35 level.

Technical support is also around 3,400.

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 284.74. The QQQ closed .56 higher. Watch the 285.94 level again today. The QQQ needs to clear this level to move higher.

Daily support is around 283.

The 282.81 level should be support. And watch the 285.94 level on the upside.

Like the S & P, the QQQ crossed into an uptrend on its 60 minute chart. And the midband is 279.00 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 163.07. The IWM closed .94 higher on the day.

Watch the 162.50 level today. It should be support. And if the IWM breaks under it, look for support at 160.94.

The IWM has already crossed into an uptrend on the 60 minute chart. The 161 area is still 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 158.01. It closed .96 higher. With a close today above 157.03, the TLT should head up to 159.38.

The TLT did hold the 156.25 level. Friday's low was 50 cents above it.

The TLT did bounce off the lower band on the 60 minute chart. Getting bounce as we expected.

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 178.64. The GLD closed .19 lower on the day.

Resistance is at 180.47. To move higher, the GLD will need to close above the 178.91 level.

The GLD is below the midband on the 60 minute chart. This level should now be resistance, which is 179.60. If the GLD clears this level, it would then 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: 28.12 <

The XLE closed at 30.39. The XLE closed .15 lower. Watch the 31.25 level today.

If the XLE can clear this level, look for it to continue higher. The key level on the downside is 28.90.

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 115.04. Apple closed $.71 lower.

On the downside, watch the 112.50 level. I would expect support at this level. If it cannot hold, a drop to 100 is possible.

Apple has crossed into an uptrend on its 60 minute chart. But, the price is below the midband, which is 115.60. Apple needs to clear this level to move higher.

WATCH LIST:

Bullish Stocks: GOOGL, ALGN, HUM, PAYC, SPY, UNH, BABA, CMI, ROKU, SPLK, TEAM, LH, ITW, FDN, RMD, PYPL, QRVO, QRVO, DGX, MCHP,

Bearish Stocks: LMT, NOC, LHX, CME, IBM, LDOS, CBOE, STWD, SBRA