June 5, 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 $18 call on OSTK. The call is deep in the money will most certainly be assigned. Just leave the call alone and allow it to be assigned.

Your shares will be sold at $18 and the profit on the sale of the stock and the options will be booked.

The market took a pause yesterday and closed 10.52 points to the downside. The S & P 500 closed the day at 3,112.35.

The low for the day was 3,090.41. The S & P managed to rally 21.94 off the low to close right in the middle of the resistance level from Wednesday's daily price bar.

I mentioned yesterday that the support area from Wednesday was in the 3,110.89 to 3,114.92 area. Interesting enough is that the midpoint of this price area is 3,112.90.

So, after finding the bottom, the market rallied back to about the midpoint of the previously identified support area.

For today, the support area is between 3,109 to 3,112.

Pre open, the S & P is trading about 25 points higher.

This projects to an open around 3,137 or about 8 points above yesterdays high of 3,128.91. Yesterday's high should be support on a sell off.

Through yesterday, the weekly price bar has a range of 99.40, which is about 64 points less than the weekly average true range, which is 163 points.

The weekly price bar is bullish and through yesterday, it closed at 81% of the weekly price bar.

The midpoint of the weekly bar is 3,081 and I would expect a close above this level.

The market is overbought and I do expect a pullback soon.

The bullish percent index now reads 86.6%. This reading is actually greater than the reading of 83% on January 17th.

But it is less than the 91% reading on April 9th.

So, we know the reading is at a level where a reversal should be forthcoming.

The VIX should help us to determine when that reversal will come.

The midband on the daily chart is 22.64 and the VIX closed just above it.

If the midband holds as support and begins to head up, a reversal should be coming. So, watch the midband.

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 25.81. The VIX closed 0.15 points higher.

The low for the day did take out the major 25 level, but the VIX managed to close above it.

At this point, look for resistance at 27.35.

Technical resistance is around 27.50.

S & P 500:

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

The S & P closed at 3,112.35. The projected open is around 3,137 of about 12 points above the major 3.125 level.

The 3,125 level should be support.

And watch the 3,164 level on the upside. The S & P will need two closes above 3,164 level to move higher.

There is technical support right around the 3,100 level.

QQQ:

Minor level: 239.00
Major level: 237.50 Hit
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

The QQQ closed at 235.03. Watch for support at the 235.91 level

The major 232.78 level should be support. And the minor 235.91 level should also be support.

Two closes under 235.91 and the QQQ should drop to 231.

And the 235 area should be technical support.

And 235.50 area 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 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
Minor level: 129.69
Minor level: 126.56
Major level: 125.00

The IWM closed at 144.59. The IWM closed above the 143.75 level.

Watch for support at the 142.19 level. And the IWM would need to close under this level to drop.

And two closes above 145.31 and the IWM should head up to 150.

The 142 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 Hit
Minor level: 158.60
Minor level: 157.03
Major level: 156.25
Minor level: 155.48

The TLT closed at 157.23. Look for a move to 156.25.

To move higher, the TLT would need to close back above 159.38.

The TLT is in a downtrend on the 60 minute chart. Resistance on that timeframe is now around 160.

The TLT is oversold and a bounce should be coming.

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 Hit
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 161.28. With a close above 160.16 today, the GLD should head up to 162.50.

The major 159.38 level should be support.

Technical resistance s now around 161. Watch how the GLD reacts at this level. A break under it and the GLD should head lower. If it holds as support, look for a move higher.

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 < HIT
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 41.74. The XLE has now had two closes above 41.41, so the objective should be to 43.75.

40.63 should be support. And the minor 39.83 level should also be support.

And technical support should be around 41.

AAPL:

Major level: 337.50
Minor level: 334.38
Minor level: 328.13
Major level: 325.00 HIT
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

Apple closed at 322.32. It pulled back 2.80.

The minor 321.88 level should still be support. And Apple will need two closes above 328.13 to head higher.

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