June 19, 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 are two positions that expire today. The short $14.50 call on PRA and the short $17 call on DXC.

Both stocks settled yesterday below their respective strike prices, but PRA is only 30 cents from the strike. Depending upon how PRA trades today, I may suggest you buy back the short call. I will issue a separate email if that is the situation.

The S & P 500 managed to close 1.85 points higher for the day. The S & P closed at 3,115.34.

The market got as low as 3,093.51, before rallying back to close 21.83 points off the low.

The day closed at 82% of the range of the daily bar. This suggests the odds of taking out yesterday's high before the low at around 4 to 1.

And pre open, the S & P is trading about 35 points higher. This projects to an open around 3,150 or about 30 points above yesterdays high.

So, the close percentage should be satisfied at the open.

And the projected open is above the high of the bearish long-range candle from last Thursday. The high of that candle is 3,123.53, which should be support on a pullback.

The projected open should also be about 25 points above the major 3,125 level, which should also be support.

I also want to point out that yesterday's range was only 26.49 points. This was a contraction of 40% of the daily average true range.

This was the second consecutive day where the daily range was less than one half the daily average true range.

So, we do expect an expansion and based on the pre market trading, it certainly suggests we will see that today.

In taking a look at the weekly price bar, the range through yesterday is 187 points. This is greater than the weekly average true range, which is 176 points.

The projected open should put the weekly range well above the average.

And the projected open would be above last week's high of 3,233.13. Watch this level if the market does pull back. A close above this level would be extremely bullish.

Here are the Key Levels for the Markets:

$VIX:

Major level: 37.50
Minor level: 36.72
Minor level: 35.16 **
Major level: 34.38
Minor level: 33.60 **
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

The VIX closed at 32.94. It closed 0.53 lower on the day.

This now suggests that the VIX should drop to 31.25. Watch to see if the VIX breaks under this level.

Also, the 31 area should be support. So, watch to see how the VIX reacts at this level.

Technical resistance is around 34.

S & P 500:

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
Minor level: 2,929.75
Minor level: 2,851.65
Major level: 2,812.50
Minor level: 2,773.45
Minor level: 2,695.35
Major level: 2,656.30

The S & P closed at 3,115.34. The low for the day stopped about 7 points above the minor 3,085.95 level.

The projected open should be around 3,150. Watch the minor 3,164 level on the upside if the market continues to run. A break of this level and it should be support.

Technical support is around 3,120.

QQQ:

Major level: 250.00
Minor level: 248.54
Minor level: 245.31 **
Major level: 243.75 < Hit
Minor level: 242.15
Minor level: 239.00
Major level: 237.50
Minor level: 235.91
Minor level: 232.78
Major level: 231.22
Minor level: 229.66
Minor level: 226.56
Major level: 225.00

The QQQ closed at 244.28. With a close above the major 243.75 level, it should be support.

Watch the minor 245.31 level. Two closes above this level and the QQQ should test 250.

Support should be at 243.50. And technical support is at 244.

The upper band is now 249.

IWM:

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
Minor level: 132.81
Major level: 131.25

The IWM closed at 141.72. This was the second close under 142.19, so a drop to 137 would not be unexpected.

But, with the strong open this morning, watch to see if the IWM can reclaim the 142.19 level. If it can, it should be support.

141 should be technical support.

TLT:

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
Minor level: 155.47
Minor level: 153.91
Major level: 153.13

The TLT closed at 162.26. Yesterday's high went to 162.48 or two cents under the major 162.50 objective.

Watch to see if the TLT can clear this level. If it can 161.72 level should be support.

The TLT is in a downtrend on the 60 minute chart. Resistance should be at the 163 level, which is the midband. If the TLT can clear this level, it should be support.

GLD:

Major level: 165.63
Minor level: 164.85
Minor level: 163.28
Major level: 162.50 < Hit
Minor level: 161.72
Minor level: 160.16
Major level: 159.38
Minor level: 158.60
Minor level: 157.03
Major level: 156.25
Minor level: 155.47
Minor level: 153.91
Major level: 153.13

The GLD closed at 162.24. Watch to see if the GLD can clear the major 162.50 level.

At this point, watch the 163.28 level on the upside and 161.72 on the downside.

Technical support should be at 161.50. A break under this level the GLD should continue lower. But, it should be support.

XLE:

Minor level: 47.65
Major level: 46.88
Minor level: 46.09
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: 34.27

The XLE closed at 40.18. The XLE managed to close above the 39.83 level. This now suggests it should be support.

The 40.63 level should be support. And watch to see if the XLE can close above 41.41 level.

The midband on the 60 minute chart is now 39 and the XLE is just above it. This should now be support. A break under it and the XLE should head lower.

AAPL:

Major level: 362.50
Minor level: 359.38
Minor level: 353.13 **
Major level: 350.00 < HIT
Minor level: 346.88
Minor level: 340.63
Major level: 337.50
Minor level: 334.38
Minor level: 328.13
Major level: 325.00
Minor level: 321.88
Minor level: 315.63
Major level: 312.50

Apple closed at 351.73. Support should be at 346.88. And to move higher, Apple will need two closes above 353.13.

Technical support is right at the 346 area.

WATCH LIST:

Bullish Stocks: AMZN, TSLA, ADBE, DPZ, AAPL, ZM, MSFT, W DG, DOCU, EA, BAND, NKLA, CNNE, ZTO

Bearish Stocks: BDX, VRSN, PEP, MDT, GH, EW, ORCL, THS, FLIR, SAGE, XNCR