June 3, 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.

The market continues to push higher. Yesterday closed out the day 25.09 points to the upside.

The day closed out at 3,080.82. The S & P continues to move above the midband, which is now 2,989.71.

Speaking of the midband, as I have written in various updates, when the S & P moved back inside the lower band, the target was back to the midband.

The price expectation at that time was that the midband would be resistance the first time it was approached.

The fact that the S & P cleared the midband now suggests two things. The first is that it should be support. And the second is that the next objective should be the upper band. The upper band is 3,524, so the S & P is still about 450 points away from it.

But we also have our resistance levels to monitor as objectives.

And the objective now is to the 3,125 level.

Yesterday's close put the market within 44 points of the target.

The range for yesterday was 29.43 points. This is exactly 50% of the daily average true range, which is 59.11 points.

Yesterday was the second consecutive day where the daily range was exactly 50% of the daily average true range.

This suggests we will see an expansion. The question is when.

Yesterday's daily bar closed at 99% of the range of the daily bar. This suggests that the odds are almost 100% that yesterdays high will be violated.

ZM reported yesterday and is trading about $3 higher.

Tomorrow after the close, we get earnings from WUBA, AVGO, DOCU, and WORK.

Here are the Key Levels for the Markets:

$VIX:

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 26.84. The VIX closed 1.38 points lower.

Yesterday was the first close under 27.35. This now suggests that if the VIX closes under 27.35 today, it should drop to 25.

To move higher, the VIX will need two closes above 28.91. And to move lower, the VIX will need two closes under 27.35.

Technical resistance is around 28.

S & P 500:

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
Minor level: 2,617.25
Minor level: 2,539.06
Major level: 2,500.00

The S & P closed at 3,080.82. The objective should still be to 3,125. And 3,007.85 should offer support. And support should also be around the 3,047 level.

There is technical support right around the 3,050 level.

QQQ:

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
Minor level: 223.42
Minor level: 220.31
Major level: 218.75
Minor level: 217.19
Minor level: 214.06
Major level: 212.50
Minor level: 210.93

The QQQ closed at 235.63. The target for the QQQ should be up to 237.50.

The major 231.22 level should be support. And the minor 232.78 level should also be support.

And the 233 area should be technical support.

And 234 should be support from yesterday's daily bar.

IWM:

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
Minor level: 129.69
Minor level: 126.56
Major level: 125.00

The IWM closed at 141.39. The IWM closed above 139.06 for the second time. This now suggests that the IWM should test 143.75.

The midband is 147.60 and the IWM is just under it. The IWM is testing the midband.

The 140 area should be technical support.

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: 155.48

The TLT closed at 161.69. This was the first close under the minor 161.72 level. A close today under it and the TLT should drop to 159.38.

To move higher, the TLT would need to close back above 161.72.

The TLT is in a downtrend on the 60 minute chart. Resistance on that timeframe is now around 162.

GLD:

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 GLD closed at 162.60. The GLD would still need two closes above 163.28 to move higher.

Watch to see if the GLD can hold the major 162.50 level.

And watch the 161.72 level. Two closes under this level and the GLD should drop to 159.38.

Technical support is around 161. Watch this level. If the GLD drops under this level, it should head lower.

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 40.54. The objective for the XLE should still be up to 40.63. And yesterday's high was within 5 cents of it.

Watch to see if the XLE can clear the 40.63 level. The XLE is trading higher pre open, so it should clear the 40.63 level. It should be support.

Two closes above 41.41 and the XLE should head higher.

39.83 should be support.

And technical support should be around 39.

AAPL:

Major level: 325.00
Minor level: 321.88
Minor level: 315.63 **
Major level: 312.50 <
Minor level: 309.38
Minor level: 303.13
Major level: 300.00
Minor level: 296.88
Minor level: 290.63
Major level: 287.50
Minor level: 284.38
Minor level: 278.13
Major level: 275.00

Apple closed at 323.24. The objective for Apple should be up to 325. And Apple is within 2 points of it.

The minor 321.88 level should be support.

The 320 area should offer support.

WATCH LIST:

Bullish Stocks: GOOGL, TSLA, REGN, HUM, ASML, LULU, VRTX, LRCSm WST, COUP, ADSK, DG, SPLK, ZM, PYPL, DOCU, QLYS,

Bearish Stocks: ROKU, WUBA, FGEN, ARWR, ADSW, GOOS, MOMO