June 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.

There is one position that expires today and that is the short $7.50 call on CLVS. CLVS settled under the strike yesterday. If I do suggest an adjustment to the position, you will receive a separate email. Hold the position until further notice.

The S & P 500 managed to reverse yesterday and close 33.43 points higher on the day.

This should not be a shock as this was the scenario I laid out on Wednesday's webinar.

In fact, as the market was selling off hard on Wednesday, I said that there was still support under the market and that the most likely scenario was that the market would find that support.

I also pointed out that the 60 minute chart was still bullish and the midband should be support. The midband now reads 3,026.95. And yesterday's low went to 3,024.01 before reversing.

I was asked Wednesday if the market should reverse intraday and I said it would not. This is because of the low close percentage, which was 22% on Wednesday. This would suggest that the odds of taking out Wednesday's low of 3,032.13 before the high was about 80%.

And Thursday's low did as expected when it dropped to 3,024,01 or about 7 points below Wednesday's low.

Then your scenario should have had you looking for support around the midband, which did come in.

The other key support level would be the midband on the daily chart, which now reads 3,005.

The low did not quite get to the daily midband.

Yesterday's daily price bar closed at 96% of the range of the daily bar. This suggests that the high of 3,086.25 should be violated before the low.

There are two support areas from yesterday. The upper end is around 3,065 and the lower end is around 3,055.

The upper of last week's weekly support area is around 3,060. So watch this area on a sell off.

In taking a look at how the weekly price bar is shaping up, we see that the range through yesterday, of 131 points is 41 points less than the weekly average true range of 172 points.

And yesterday's close of 3,083.76 is about 10 points less than the open of 3,094.42.

There would be a few levels to monitor today from the weekly bar. Watch the open to see if the market can clear that level. And watch the midpoint on a sell-off. The midpoint is 3,089 and the market should most likely test this level.

Pre open, the S & P 500 is trading about 7 points higher. This would project to an open around 3,090, which would be about 4 points above yesterday's high of 3,086. So, watch the high on a pullback.

NKE reported last night and is trading about $3.50 lower.

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 32.22. It closed 1.62 lower on the day. This now suggests that if the VIX closes under 33.60 today, it should drop to 31.25.

33.60 should be a resistance level. And technical resistance is at 33.

Support is around 30.

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 3,083.76. This put the market under the minor 3,085.95 level again. The projected open should be above it. This would suggest that this level should be support.

On the upside, there is minor resistance at 3,101.

Technical support is around 3,050.

QQQ:

Major level: 256.24
Minor level: 265.68
Minor level: 251.56
Major level: 250.00
Minor level: 248.54
Minor level: 245.31 **
Major level: 243.75
Minor level: 242.15
Minor level: 239.00
Major level: 237.50
Minor level: 235.91
Minor level: 232.78
Major level: 231.22

The QQQ closed at 246.03. A close today above 245.31 and the QQQ should test 250 again.

245 should be support. And support from yesterday's daily bar is around 244.

And technical support is around 244 as well.

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 140.45. The IWM closed above the minor 139.06 level. A close today above it and the IWM should head up to 143.75.

139 should now be support.

The key on the upside is the midband, which is 146.64.

Technical resistance is around 141. If the IWM can clear this level it should head higher.

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 163.50. Yesterday was the first close above the minor 163.28 level. A close today above it and it should head up to 165.63.

By clearing the midband on the 60 minute chart, which now reads 162.34, it should be support.

GLD:

Major level: 168.75
Minor level: 167.98
Minor level: 166.41
Major level: 165.63 Hit
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

The GLD closed at 165.80. Watch to see if the GLD can hold the major 165.73 level. If it can't, look for the GLD to pull back.

The upper band is 167 on the 60 minute chart and the GLD is pulling back from it. But, it could make another run-up to the upper band.

Support should be at 165.

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 37.82. The XLE did manage to recoup the major 37.50 level.

Watch the 38.28 level. Two levels above this level and the XLE should head up to 40.63.

The midband on the 60 minute chart is now 39 and the XLE is below it. This should now be resistance. This level is 39 and the XLE will need to clear it to head higher.

The 37 area should be support.

AAPL:

Major level: 375.00
Minor level: 371.88
Minor level: 365.63 **
Major level: 362.50
Minor level: 359.38 **
Minor level: 353.13
Major level: 350.00
Minor level: 346.88
Minor level: 340.63
Major level: 337.50
Minor level: 334.38
Minor level: 328.13
Major level: 325.00

Apple closed at 364.84. The minor 359.38 level should be support. And on the upside, watch to see if Apple can close above 365.63.

Best strategy is still to buy oversold conditions off short term charts. Technical support is around 362.

WATCH LIST:

Bullish Stocks: AMZN, TSLA, SHOP, REGN, ADBE, NTES, NVDA, ASML, AAPL, PAYC, COUP, ZM, ADSK, BABA, QDEL, TWLO, ZM, CRM, EFX, PYPL, DOCU

Bearish Stocks: LH, RGLD, HAE, SAIC, DOX, AMBA, FLIR, AVA, FSCT, CMTL