June 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.

Yesterday, I suggested selling calls against the CLVS and DXC positions.

The suggestion was to sell the $7.50 call on CLVS that expires on July 10th. And on DXC, the suggestion was to sell the July monthly $17 call.

Today marks the halfway mark through 2020. And what a year it has been.

Today also closes out the monthly price bar for June, which I will discuss further after reviewing yesterday's daily price action.

The S & P 500 closed 44.19 points higher. The day closed out at 3,053.24.

The market opened yesterday 9.54 points higher. After the open, the market dropped to a low of 2,999.74, taking out Friday's low by 4.89 points.

Therefore the close percentage projection from Friday was satisfied right off the open.

After stopping at the low, the market rallied all day to hit a high of 3,053.89.

The range for the day ended up at 54.15 points. The daily bar closed at 99% of the range of the daily price bar.

This suggests the odds highly favor yesterday's high being violated before the low.

The low for the day did take out the midband on the daily chart, which is now 3,006.32.

However, the market was able to close above this level. This level should still be support until a close under it.

And for today, the support level from yesterday's daily bar is around 3,027. The upper end of the support area is 3,035.

In taking a look at how the monthly price bar is forming, we see a few key levels that should impact the market today.

The first is that yesterday's close of 3,053.89 is only about 15 points above the open of 3,038.78.

Watch the open for support on a sell-off.

And the midpoint so far is 3,099.40. And yesterday's close is about 45 points below the midpoint.

The other key level is the upper band on the monthly chart, which is 3,186.46.

The monthly range through yesterday is 267 points and the monthly average true range is 263 points.

So, the monthly bar has already hit its average, so it would suggest that the monthly high or low will most likely not be violated.

To violate the monthly high, the S & P would have to move 179 points higher today. To take out the low, it would have to drop 88 points.

A rally to the midpoint and a close above the midpoint of 3,099.40 would be bullish for the market.

Pre open, the S & P is trading about 11 points lower. This projects to an open around 3,042 or about 7 points above the upper end of the support area of 3,035.

I should point out that the 3,035 support area is also the midband on the 60 minute chart, which should be a strong support level.

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 32.78. It closed 2.95 lower on the day. With the VIX closing back under the 33.60 level, it should now be resistance.

And a close under 33.60 today would suggest a drop to 31.25.

Look for resistance at 34.38.

There is a technical support level at 31. A break under this level and the VIX should continue lower.

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 3,053.24. The objective for the S & P should be for a run-up to 3,125.

And the 3,007.85 level should be support. And 3,046 is a minor support level as well.

Technical support is around 3,035.

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 242.84. The QQQ managed to recoup the minor 242.15 level.

The 239 level should be support.

Technical support is around 241. Short term charts remain bullish.

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 141.14. This now suggests that if the IWM closes above 139.06 today, it should test 143.75.

The minor 139 level should be support.

Technical resistance is at 140.

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 164.73. This was the first close under 164.85. A close today under 164.85 and the TLT should drop to 162.50.

The TLT will need to clear the 165 area to head higher.

Support is still around 162, which is the midband on the 60 minute chart.

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 166.63. Yesterday was the second close above the 166.41 level. This now suggests that the GLD should test 168.75.

The upper band is 167.90 on the 60 minute chart. The GLD sold off from the upper band and is making another run at it.

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. The XLE managed to recoup the minor 36.72 level.
Watch to sell if the XLE can clear the major 37.50 level. If it can, it should head higher.

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 35 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 361.78. Apple managed a strong reversal, closing 8.15 higher on the day.

I did say that the "Best strategy is still to buy oversold conditions off short term charts."
Technical support is around 358.

WATCH LIST:

Bullish Stocks: AMZN, MELI, SHOP, NTES, AAPL, RNG, COUP, SPOT, ZM, WIX, VEEV, HUBS, TWLO, SPLK, DOCU, ALNY, WING, EA

Bearish Stocks: LMT, NOC, COST, INTU, APD, BDX, PANW, ANET, VRSN, JAZZ, CHKP, KEYS, CYBR, HCA