September 8, 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.

I suggested closing the CRUS uneven straddle on Friday. The result for the overnight trade was a gain of 38%. CRUS got a bit oversold intraday on Friday, which is why I suggested you book the profit.

The selling pressure followed through on Friday. The S & P 500 closed 28.10 points lower.

The week closed out at 3,426.96. And the daily price bar closed at 60% of the range of the daily bar.

Even though the market closed lower, it did manage to close above the midpoint, which is actually bullish.

And the daily range was 129.52 points. This also qualified as a long-range candle. This was because the range was 263% of the daily average true range.

The midpoint from Friday was 3,414 and should be a support area. Above this level, there is a resistance level at 3,440.28.

For the week, the S & P closed 81.05 points lower. For the week, the S & P closed 2.31% lower.
And the weekly price bar closed at 32.4% of the range of the weekly bar. This does suggest that last week's low of 3,349.63 should be violated before the high of 3,588.11.

The resistance levels from last week's weekly price bar should be around 3,470.

The monthly support level of 3,400 should also be a level to watch. Under this level, the next support is around 3,370.

Pre open, the S & P is trading about 35 points lower. This projects to an open around 3,390. This would be right between the monthly price bar support levels. Watch these levels today.

Earnings continue this week. This afternoon, we get earnings from CASY, COUP, and LULU.

Wednesday after the close we get earnings from RH and ZS.

And finally, Thursday afternoon we get earnings from CHWY and PTON.

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 39.18. For the day, the VIX closed 3.42 points lower. This was a loss of 10.18%.

With the S & P closing lower and the VIX as well, this created another divergence.

As you will recall, the top was preceded with multiple days where both the VIX and the S & P closed higher.

This put the VIX well above the midband on the daily chart, which is 25.50. That level should now be support.

Watch the minor 32.03 level today. If the VIX can clear this level, it should head higher. But it should be resistance until that happens.

Short term, the VIX is overbought. The upper band on the 60 minute chart is 30.64 and the VIX is right at that 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 3,426.96. I mentioned this on Friday ... "At this point, the 3,476 level should be resistance." And as it turned out, the high for the day was 3,479.15 or about 3 points above the minor resistance level.

Watch the minor 3,398.35 level today. The projected open should be just below it. Two closes under this level and the S & P should drop to 3,281.

3,355 is a technical support level for the S & P.

QQQ:

Major level: 306.25
Minor level: 304.69
Minor level: 301.56
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

The QQQ closed at 283.58. The QQQ closed 3.83 points lower.

And it put the QQQ under the upper band on the daily chart, which is 297.13. This level should now be resistance. The QQQ has now dropped about 11 points under the upper band.

A close today under the 285.94 level and the QQQ should drop to 281.

Technical support is at 274.27.

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 152.80, closing .98 lower. The objective should be down to the major 150 level.

The 156.25 level should be resistance. And the minor 154.70 level should also be resistance.

Key technical level is 153. A break under this level should also suggest lower prices to follow.

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 162.74, closing 3.15 lower. The TLT closed just above the 162.50 level.

Technical resistance is now around 165. Short term trends remain bearish. The TLT had the short term bounce and started to move back down.

Watch the minor 161.72 level. Two closes under this level and the TLT should drop to 158.38.

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
Minor level: 183.60
Minor level: 182.03
Major level: 181.25 < HIT
Minor level: 180.47
Minor level: 178.91
Major level: 175.00

The GLD closed at 181.64 The GLD closed .50 higher on the day. The GLD hit the 181.25 level already. Watch to see if this level can hold.

Short term momentum has turned bearish. The technical resistance level is 182.

Two closes under 180.47 and the GLD should drop to 175.

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 HIT
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 34.87. The objective should be down to 34.37 and Friday's low was 7 cents above it.

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

The next minor level to the downside is 33.59.

AAPL:

Major level: 150.00
Minor level: 146.88
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

Apple closed at 120.96. Apple closed .08 higher. The objective for Apple should be a drop to 112.50.

Also, Apple closed under the upper band on the daily chart. That price level is 123.51 and should now be resistance.

Technical resistance around 124.

WATCH LIST:

Bullish Stocks: ORLY, ZM, AVGO, FDX, MMM, CAT, NLE, ALXN, ZEN, ALB, CHWY, KR, DKS, WMGI

Bearish Stocks: BDX, BIB, BA, IBM, CB, TRV, DLTR, LW, CVS, PSX, VLO, OMC, HSIC, EOG, KEX, WBA, NBR, FANG, JBL, CSOD