May 15, 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.

There is one open position that expires today and that is the short $18 call on IQ. Hold the position and if I do suggest an adjustment, you will receive a separate email.

Yesterday, the S & P 500 bounced from the two day sell-off from Tuesday and Wednesday.

But, we were expecting a bounce based on the technical set up on the short term charts. The set up being that the 60 minute chart is in an uptrend. And the price fell below the lower band on the 10 minute chart.

As it turned out, the S & P closed 32.50 points higher. And the day closed at 100% of the range of the daily bar.

This does suggest that yesterday's high of 2,852.80 should be violated before the low of 2,766.64.

And the range for the day was 86.16 points. This exceeded the daily average true range of 75.03.

The support level from yesterday's daily bar should be in the 2,810 to 2,823 area.

Pre open, the S & P is trading about 27 points lower. This projects to an open around 2,825 or a few points above the upper end of the projected support area.

Watch the support area I mentioned above.

In taking a look at how the weekly price is forming, we see that the range through yesterday is 179 points. And the weekly average true range is 177 points. So, it is possible that the range for the week is already in.

The weekly midpoint is 2,856. And yesterday's close was 2,852.50 or about 3.50 points below the midpoint.

Watch to see if the S & P can close above the midpoint.

Here are the Key Levels for the Markets:

$VIX:

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
Minor level: 28.91
Major level: 28.13
Minor level: 27.35
Minor level: 25.78
Major level: 25.00

The VIX closed at 32.61. The VIX dropped 7.57% yesterday.

We were looking for resistance at 37.50 yesterday and the VIX got as high as 39.28 before falling under the 37.50 level.

Resistance should be around 36.

And if the VIX closes under 33.60 today, it should drop to 31.25.

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

The S & P closed at 2,852.50. The S & P dropped to just under the minor 2,773.45 level and managed to rally back to close above the minor 2,851.65 level.

A close today above 2,851.65 and the S & P should move up to 2,968.80.

And at this point, the major 2,812.50 level should be support.

Technical support is around 2,828.

QQQ:

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
Minor level: 207.81
Major level: 206.25
Minor level: 204.69
Minor level: 201.56

The QQQ closed at 221.83. The QQQ closed 2.49 points higher.

If the QQQ closes above 220.31 today, it should move up to 225.

218.75 should be support.

Technical support as around 219.

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
Minor level: 123.44
Minor level: 120.31
Major level: 118.75

The IWM closed at 123.12. If the IWM closes under 123.44 today, it should continue lower.

Biased for a test of 118.75.

Technical support is around 120.

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 167.14. A close today above 166.41 and the TLT should test 168.75.

The 165 area should be technical resistance. And the 169 area should be resistance.

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 163.01. The next minor level on the upside is 163.28. And on the downside, the level is 161.72. The GLD still needs to close above 163.28 today to move up to 165.63.

Technical resistance is around 164.

The 161 area is technical support.

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 36.13. 37.50 should be resistance. So, the XLE will need to clear this level to head higher.

A test of 34 is likely at this point.

Technical support should be around 35. And resistance at the 38 level.

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 309.54. Watch the 309.38 level now on the upside. And Apple managed to close just above it.

The major 300 level should be support. And the 303 level should be support as well.

The 290 area should offer technical support. And technical resistance is around 313.

WATCH LIST:

Bullish Stocks: GOOGL, SHOP. CHTR, DXCM, NOW, ADBE, NVDA, AAPL, RNG, AAPL, ZBRA, CLX, COUP, AGN, MSFT, ADSK, CRM

Bearish Stocks: WBA, PINC, LX, RESI, LC