May 1, 2020 - MDT Pro Tips A.M.

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.

Before I begin, I do need to mention that there is one position that expires today. And that is the short $20.50 call on DBX. DBX closed in the money yesterday by about 50 cents. So, hold the position and if I do make an adjustment, you will receive a separate email.

I did make a suggestion to add UNFI. This was a straight out stock purchase.

The month of April closed out with the S & P 500 closing 27.08 points lower.

For the day, the S & P closed at 2,912.43. This put the market about 10 points below the minor 2,929.75 level. And it also put the market under the 61.8% retracement level, which is 2,934.49.

The daily price bar did close at 52% of the range of the bar. Not quite a bullish close. But neither is it tremendously bearish.

Having said that, the S & P is trading about 57 points lower as I write this.

This would project to an open around 2,855 or about 37 points lower than yesterdays low, which was 2,892.47.

2,877 is a short term oversold level. So, watch this level on a rally.

For the week, the S & P has had a high of 2,954.86 and a low of 2,852.89. The range through yesterday was only 101.97 points or about 57% of the weekly average true range, which is 178.72.

The weekly midpoint is 2,903.88. And with a projected open around 2,855, the market should open about 48 points below it.

If the market breaks, it could test the low of 2,852. On a bounce in the market, I would expect a test of the midpoint of 2,904.

In taking a look at the April monthly price bar, it did close out as an inside bar. Which does suggest that we will see more volatility.

Th monthly range was 507 points. This was almost double the monthly average true range.

The midpoint of the monthly price bar is 2,700 and should be resistance. 2,912 is the monthly close and should also be a support or resistance level depending upon where the market is trading.

AMZN reported and is trading about $120 lower pre market. And AAPL is trading $7.60 lower.

Here are the Key Levels for the Markets:

$VIX:

Major level: 43.75
Minor level: 42.97
Minor level: 41.40
Major level: 40.62
Minor level: 39.84
Minor level: 38.28
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

The VIX closed at 34.15. The VIX closed 2.92 points higher for the day.

This put the VIX just under the major 34.38 level. With the market trading lower pre market, the VIX should bounce at the open.

Watch the major 40.62 level on the upside. If the VIX cannot clear this level, is should head lower.

Technical resistance is around 37. And above that level there is resistance at 44.

S & P 500:

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
Minor level: 2,460.95
Minor level: 2,382.85
Major level: 2,304.75
Minor level: 2,226.65

The S & P closed at 2,912.43. At this point, minor support should be at 2,851.65. And the 2,929.75 should be resistance.

2,866 should be a technical support level. And the market should open just under it. Watch to see if the market can clear this level on a rally.

Resistance is around 2,900.

QQQ:

Minor level: 220.31
Major level: 218.75 <
Minor level: 217.19
Minor level: 214.06
Major level: 212.50
Minor level: 210.93
Minor level: 207.81
Major level: 206.25
Minor level: 204.69
Minor level: 201.56

The QQQ closed at 218.91. The QQQ managed to close above the 218.75 level for the second day.

Watch the minor 217.19 level. Two closes under this level and the QQQ should drop to 212.50.

The 214 area should now be support. And 220 should be resistance.

IWM:

Major level: 156.25
Minor level: 154.69
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 <
Minor level: 129.69
Minor level: 126.56
Major level: 125.00

The IWM closed at 130.31. The IWM closed just under the major 131.25 level. Watch the minor 129.69 level. Two closes under this level and the IWM should drop to 125.

Support should be around the 123.00 area. And techncial resistance is at 133.

TLT:

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
Minor level: 153.91
Major level: 153.13
Minor level: 152.35

The TLT closed at 166.74. The TLT closed 1.97 points lower. The TLT is selling off from the upper band. That level is now 172.61 and should be resistance.

A break under 165.63 and the TLT should continue lower.

Minor resistance is at 169. The TLT will need to clear this level to head higher. And if it does, it would then be support.

Support should be around 166.

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 158.80. Resistance should now be at 159.38. And if the GLD has two closes under 158.60 it should drop to 156.

162.50 should be resistance. And technical resistance is at 154.

XLE:

Minor level: 50.78
Major level: 50.00
Minor level: 49.22
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

The XLE closed at 38. The XLE failed to close above 38.28. It would still need two closes above 38.28 to move to 40.63.

If the XLE breaks under 36.72, it should continue to drop.

Technical support should be around 36. And resistance at the 40 level.

AAPL:

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
Minor level: 271.88
Minor level: 265.63
Major level: 262.50

Apple closed at 293.80. Apple reported and is trading about $7.50 lower.

Watch the minor 284.38 level on the downside and 290.63 on the upside.

Apple has crossed into an uptrend on the 60 minute chart. And the 274 area should be technical support.

Minor resistance is around 293.

WATCH LIST:

Bullish Stocks: GOOGL, SHOP, REGN, DPZ, DXCM, NOW, BDX, WST, ADSK, KLAC, LLY, ZM, RH, SMG, DOCU, BMRN, SWKS, ETN, PZZA, CRUS, AMA, AZN

Bearish Stocks: CB, AJG, NWE, WWD, BLKB, SCI, LUV, SHOO, CAL