July 17, 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 first is the short $15 call on PRA. PRA closed yesterday at $15.84, so the odds favor the calls being assigned. Leave the position alone.

The second is the short $17 call on DXC. DXC settled yesterday under the strike price.

I will issue alerts if the positions need to be adjusted.

I also suggested a debit spread on ZEN.

The S & P 500 closed modestly lower yesterday. It closed down 10.99 for the day, at 3,215.57.

And the range for the day contracted with a range of only 21.80 points. This was less than 40% of the daily average true range which is now 57.23 points.

This would suggest we will see an expansion.

And the day closed out at 78% of the range of the daily bar, which does suggest that yesterday's high of 3,220.39, should be violated before the low of 3,198.59.

The support area from yesterday is in the 3,209 to 3,212 area.

Pre open, the S & is trading about 5 points higher. The projected open would be right around yesterday's high. Watch to see if the market can take out the high.

The weekly price bar through yesterday is also contracting. The range is only 110 points, which is 68% of the weekly average true range.

And yesterday's close was only about 10 points above the open, but it is 30 points higher than last week's close.

The midpoint is 3,183, which should be support on a sell off.

If the price moved to the weekly average true range, it would project to a high of 3,290. If it did make that move today, it would take out our upside objective.

NFLX reported last night and is trading about $37 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 Hit
Minor level: 27.35
Minor level: 25.78
Major level: 25.00
Minor level: 24.22

The VIX closed at 28, up .24 on the day.

The VIX closed for the second day under the major 28.13 level.

The VIX will need two closes under 27.35 to head lower.

It is still under the midband on the 60 minute chart. This level should now be resistance. The price level is 30. And the 60 minute chart is close to crossing into a downtrend.

S & P 500:

Major level: 3,281.20 <
Minor level: 3,242.15
Minor level: 3,164.00 **
Major level: 3,125.00 < Hit
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 3,215.57. The objective for the S & P should still be up to 3,281.

Support should be at 3,164. And minor support is at 3,203.

Technical support is around 3,200.

QQQ:

Major level: 268.75
Minor level: 267.18
Minor level: 264.05
Major level: 262.50 Hit
Minor level: 260.93 **
Minor level: 257.80 <
Major level: 256.25
Minor level: 254.69
Minor level: 251.56
Major level: 250.00
Minor level: 248.54
Minor level: 245.31
Major level: 243.75

The QQQ closed at 259.12. This was the first close under the minor 260.93 level. A close today under this level and the QQQ should drop to 256.

Watch the 260.93 level today. It will need to recoup this level to head higher.

The upper band is now 263.23, which should now be resistance.

Watch the minor 257.80 level, which I would expect support to be. And technical support is also around 258.

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 < Hit
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 146.16. This was the second close above 145.31. This now suggests the IWM should head up to 150.

But the IWM is right at the midband, which is 146.04. This is the key level to watch.

With the IWM confirming to the upside, I am biased for the IWM to move higher.

So, you have a few key things happening at the moment. Best to step aside and wait to see what confirms.

TLT:

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
Minor level: 158.60
Minor level: 157.03
Major level: 156.25
Minor level: 155.47

The TLT closed at 167.13. The TLT reversed back to the upside and if it closed above 166.41 today, it should head up to 168.75.

165.63 should now be support. Watch this level. A break under
his level and the TLT should head lower.

167 is a minor technical support level. A break under this and the TLT should head lower.

GLD:

Major level: 171.89
Minor level: 171.11
Minor level: 169.54
Major level: 168.75 < HIT
Minor level: 167.98
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

The GLD closed at 168.73. The GLD closed just under the major level. it will need to clear 168.75 to head higher.

The minor 167.98 level should be support. And 168.75 should also be support.

Technical support should still be at 169.

XLE:

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 Target - HIT
Minor level: 36.72 **
Minor level: 35.15
Major level: 34.37
Minor level: 33.59
Minor level: 32.03
Major level: 31.25

The XLE closed at 37.21

At this point, the minor 36.72 level should be support. A break under this level and the XLE should drop. If it clears 38.28 on the upside, then it should head higher.

And technical resistance is still around 39. I am biased for a move higher.

AAPL:

Major level: 400.00
Minor level: 396.88
Minor level: 390.63 **
Major level: 387.50 < Hit
Minor level: 384.38 **
Minor level: 378.13
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

Apple closed at 386.09. Apple closed 4.81 lower on the day. It closed under the major 387.50 level.

This is now the key level. To move higher, Apple will need to clear 387.50.

However, Apple is right at the upper band on the daily chart. That level is 401.49. This sets up a few price expectations.

And technical support is around 386.

WATCH LIST:

Bullish Stocks: AMZN, TSLA, GOOGL, SHOP, REGN, NFLX, NTES, ADBE, DXCM, NVDA, DPZ, AAPL, LRCX, COUP, VRTX, WIX

Bearish Stocks: ORLY, LMT, MA, NOC, CTAS, ULTA, MCD, BURL, SYK, MMM, AAP, ZBH, IBM, HS, CVXADS, FTDR, FANG, DIN, AJRD, FUN, HFC