September 1, 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 closed out the month of August with the day closing 7.70 points lower. The day closed out at 3,500.31.

And we saw some divergences in the markets as well. The DOW closed 223.82 points lower. So, the DOW closed lower on the day, along with the S & P. However, the NASD Composite continued its torrid pace, closing 79.82 points higher.

The NASD continues to be the market leader.

The S & P 500 daily bar also contracted, with a range of only 21.52 points. This was 66% of the daily average true range, which now reads 32.64 points.

And the day closed out at 33% of the range of the daily bar. This does suggest that yesterday's low of 3,493.25, should be violated before the high of 3,514.77.

The resistance level from yesterday's daily bar is in the 3,504 area.

I want to take a look at how the August monthly price bar-shaped up.

The monthly price bar closed 229.19 points higher. And the August price bar closed at 93.7% of the range of the bar.

This does suggest that the high of 3,514.77 should be violated before the low of 3,284.53.

The range for the month was 230 points, which was 90% of the monthly average true range, which is 256.25.

Support from the August monthly price bar is in the 3,400 area. Below that level, there is support around 3,394.

The August price bar is 5th consecutive higher close on a monthly time chart.

And the key is that price is above the upper band on the monthly chart. That price level is 3,254.22.

Yesterday's close put the S & P about 250 points above the upper band on the monthly chart. This level should now be support.

Pre open, the S & P is trading about 7 points higher. This would suggest a close around 3,507 or just above the daily resistance level of 3,504 from yesterday.

Assuming the market keeps moving higher, look for a test of 3,514.77.

ZM reported last night and is trading almost 40% higher. Pre open, ZM is up $125.90.

Tomorrow, after the close, we hear from CRWD.

And Thursday, after the close, we get earnings from AVGO, DOCU, and RH.

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 Midband
Minor level: 24.22
Minor level: 22.66
Major level: 21.88
Minor level: 21.10
Minor level: 19.53
Major level: 18.75

The VIX closed at 26.41. The VIX closed 3.45 points higher for the day.

This put the VIX above the midband, which is 25.32. And it closed above the 25.78 level.

The VIX will need to drop under 25.78 to head lower. And watch the midband today. If it holds as support, we may start to see some profit-taking.

Technical resistance is around 27.

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 3,500.31. The objective should still be up to the 3,593.60 level.

This suggests that the 3,476.45 level should be support. And support is at 3,457.

Technical support is around 3,500.

QQQ:

Major level: 300.00
Minor level: 298.44
Minor level: 295.31
Major level: 293.75 < HIT
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

The QQQ closed at 294.88. The QQQ closed 2.35 higher on the day.

The upper band, which is 292.39. With the QQQ above this level, it should be support.
The QQQ closed above the objective of 293.75. At this point, watch the minor 295.31 level. Two closes above this level and the QQQ should test 300.

Support should be at 292.19. And technical support is around 293.

IWM:

Major level: 162.50
Minor level: 160.94
Minor level: 157.81
Major level: 156.25 HIT
Minor level: 154.70 **
Minor level: 151.56
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

The IWM closed at 155.43, closing 1.69 lower. The IWM closed under the 156.25 level and managed to hold above 154.70. This level should be support.

Technical support is around 153. Watch to see if the IWM can close above 157.81.

TLT:

Major level: 171.88
Minor level: 171.10
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 Target Hit!
Minor level: 161.72 **
Minor level: 160.16
Major level: 159.38

The TLT closed at 161.19, closing .66 higher. Objective should now be down to 159.38.

Technical resistance is now around 164. Short term trends remain bearish. But, short term the TLT is oversold and bounce should be expected.

GLD:

Major level: 190.63
Minor level: 189.85
Minor level: 188.28
Major level: 187.50
Minor level: 186.72
Minor level: 185.16
Major level: 184.38 HIT
Minor level: 183.60
Minor level: 182.03
Major level: 181.25
Minor level: 180.47
Minor level: 178.91
Major level: 175.00

The GLD closed at 184.83 The GLD closed .44 higher in the day. This brings the GLD to above the major 184.38 level.

With two closes under 180.47, the GLD should drop to 175.

The upper band is 191.55 and should now be resistance.

The 183 area should be a technical support level. Watch the minor 185.16 level today.

XLE:

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: 34.37
Minor level: 33.59
Minor level: 32.03
Major level: 31.25

The XLE closed at 35.65. The objective should be down to 34.37.

Watch to see if the XLE can hold the 34.37 level.

Technical resistance is at 37. And technical support should be around 35 as well. Short term, the XLE it oversold and I do expect a bounce.

AAPL:

Major level: 412.50
Minor level: 409.38
Minor level: 403.13
Major level: 400.00
Minor level: 396.88
Minor level: 390.63
Major level: 387.50
Minor level: 384.38
Minor level: 378.13
Major level: 375.00
Minor level: 371.88
Minor level: 365.63

Apple closed at 129.04. Apple closed 4.23 higher. Apple is now trading split adjusted and I will adjust the levels for tomorrow.

The upper band is 120 and should be support. 126 should be technical support.

WATCH LIST:

Bullish Stocks: AMZN, TSLA, GOOGL, NVDA, AAPL, NTES, LULU, MA, COST, INTU, AVGO, RH, ZM, FB, BABA, HD, CRM, WDAY, V, MSFT, DE, KLAC, PYP:

Bearish Stocks: BDX, MLM, ATO, ES, DUK, AEP, EHTH, CMS, WUBA, HES, KEX