September 30, 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.

After three consecutive days of the S & P 500 closing higher, the market gave back some of those gains yesterday.

For the day, the S & P closed 16.13 points lower. The market closed out at 3,335.47.

The range for the day was only 30.38 points. This was exactly one half the daily average true range, which now reads 60.55 points.

And the day closed at 26% of the range of the daily price bar. This does suggest that the low should be violated before the high.

Yesterday's low was 3,327.54 and the high was 3,357.92.

And the resistance level from yesterday's daily price bar is around 3,343.

Pre open, the S & P is trading about 20 points lower. This would take out yesterday's low by about 12 points and satisfy the close projection right at the open.

Assuming this trading holds up until the open, watch the 3,321 area on an early push higher for possible resistance.

On the downside, be aware of last week's close, which was 3,298 as possible support.

As you know, I always look to the VIX to help with market direction.

And yesterday, the VIX closed literally on the midband on the daily chart. The VIX closed at 26.27, which was exactly the midband.

It will not sit here forever. That we know. The question is where will the next move be?

With a projected lower open, we know the VIX should move higher. Watch the levels on the VIX below.

MU reported and is trading about $2 lower.

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 26.27. For the day, the VIX closed .08 points higher. And as I mentioned above, it is sitting right on the midband on the daily chart.

I am still looking for higher levels to be resistance. Watch the 27.35 level. And the VIX reverses lower at this level, look for a drop and the market to bounce.

Also, watch the 26.27 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 3,335.47. The S & P has now had two closes above the 3,281 level.

This does suggest the market should test 3,437.40. And 3,320.25 should be support.

The 60 minute chart for the S & P is still bearish and is trading under the midband. That level should be the objective, which is 3,388.

Technical support is around 3,324.

QQQ:

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
Minor level: 267.19
Minor level: 264.06
Major level: 262.50
Minor level: 260.94
Minor level: 257.81
Major level: 256.25

The QQQ closed at 275.95. The QQQ closed 1.25 lower.

The QQQ took out the 275 level. Support should be at 275. If the QQQ breaks under this level, look for 273.44 to hold.

The QQQ is right at the midband on its 60 minute chart. That level is 277.66. If the QQQ can clear this level, it should head higher. Technical support should be at 274.

IWM:

Major level: 162.50
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
Minor level: 142.19
Minor level: 139.06
Major level: 137.50
Minor level: 135.94

The IWM closed at 149.34. The IWM closed .68 lower on the day.

This put the IWM back under the major 150 level and above the midband on the daily chart.

The midband is now 145.95 and should now be support. And support should be at the 148.44 level as well.

And the midband on the 60 minute chart is 153.16. Technical support should be around 148.

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 <
Minor level: 161.72
Minor level: 160.16
Major level: 159.38

The TLT closed at 164.84. It closed .19 higher.

To move higher, the TLT needs to recoup the 164.85 level. If not, a drop to 162.50 would be expected. And with a close today under 164.85, the TLT should drop to 162.50. Same as yesterday, only that the TLT is now within one cent of the 164.85 level.

The 165 area is still technical resistance. This is the key area at the moment.

Short term charts remain bearish.

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 < HIT!
Minor level: 174.25
Minor level: 172.70
Major level: 171.89

The GLD closed at 178.19. The GLD closed 1.49 higher on the day.

Watch the minor 178.91 level. Two closes above this level and the GLD should head up to 181.25.

The GLD is pushing up from the lower band on the 60 minute chart. Look for a move up to the midband, which is 182.

Getting the oversold bounce we expected.

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 30.04. The XLE closed .85 lower. Getting the oversold bounce.

The XLE needs to clear the minor 30.47 level to head higher.

Short term the XLE is oversold. It did move above the lower band on the 60 minute chart, which is now 28.08. This should be support on a retest.

Looking for a bounce at the lower band. Technical support should be around 30.

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 114.09. Apple managed to close $.87 lower. Next minor level is 115.63. Two closes above this level and Apple should test 125.

With Apple clearing 112.50, look for this level to be support.

Apple broke under the midband on the 60 minute chart. That level is 117 and should be resistance. Apple has crossed into a downtrend on the 60 minute chart. Short term momentum is bearish. Watch the midband.

The lower band is 99 and that should be support now.

WATCH LIST:

Bullish Stocks: ZM, FDX, ROKU, NKE, GH, Z, CNI, DG, AAXN, NTRA, RUN, TWTR, VSLR, TOL,

Bearish Stocks: LMT, BIIB, FLT, CME, CI, BA, IBM, CB, CBRL, ROST, YUM, BAX, EW, HAS, WYNN