May 27, 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.

Yesterday, I suggested a short term debit spread on CTXS. The idea was to buy the June 12th $138 call and sell the $142 call against it.

The S & P 500 closed 36.32 points higher yesterday. The day closed out at 2,991.77.

This was the first close above the major 2,968.80 level, which has been our objective.

This also put the market above the midband on the daily chart. The midband is now 2,984.59. So, yesterday managed to close about 7 points above the midpoint.

This level should now be support.

Even though the S & P closed 36.32 points higher, the market gapped 48.63 points higher at the open.

So, after the move off the open, the S & P essentially sold off intraday.

The high for the day ended up at 3,021.72 and the low was 2,988.17.

The intraday range ended up as 33.55 points, which was less than the daily average true range, which is 66.25 points.

Once again, the majority of the move was made by holding overnight. This tends to happen when you see these large gaps open.

The daily price bar closed at just 11% of the range of the daily bar. The daily bar did make a higher high and higher low, so the daily price bar was still bullish,

And pre open, the S & P is trading about 31 points higher.

This would project to an open around yesterday's high of 3,021.72. Watch to see if the market can hold support at the high.

If it does pull back, support should be around the midband, which is 2,984.

And support from yesterday's daily bar is in the 2,998 to 3,005 area.

Earnings do continue this week. Wednesday afternoon we get earnings from ADSK and WDAY.

Thursday afternoon, we hear from COST, CRM, and ULTA.

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 < Hit
Minor level: 27.35
Minor level: 25.78
Major level: 25.00

The VIX closed at 28.01. The VIX closed 0.15 point lower yesterday. And it was the first close under 28.13.

At this point, the next level to the downside is 27.35. Two closes under this level and the VIX should drop to 25.

The minor 28.91 level should be resistance.

Technical resistance is around 29.

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 2,991.77. The S & P should open around 3,022. This is above the minor 3,007.85 level, which should be support.

And two closes above 3,007.85 and the S & P should test 3,125.

This level should be support. And support is also at 2,983.

There is technical support right around the 2,978 level.

QQQ:

Major level: 237.47
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 229.04. The QQQ sold off to under the 229.66 line. It will need to regain this level to head higher.

This is because a close under 229.66 today and the QQQ should drop to 225.

227 should be techncial support.

The 231 area should be support level from yesterday's daily bar. Watch to see if the QQQ can clear this level.

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 138.78. The IWM cleared the 137.50 level, which was the objective.

At this point, the IWM will need two closes above 139.06 to move up to 143.75.

And 135.94 should be support, along with the major 137.50 level.

The 138 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 163.33. Look for a move to 162.50.

The TLT will need to clear the major 165.63 level to head higher. But, this level should be resistance.

The TLT is in a downtrend on the 60 minute chart. Resistance on that timeframe is now around 164.

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 160.89. With a close today under 161.72, the GLD should drop to 159.38.

163.28 should be resistance.

Technical support is around 160. 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 39.55. The objective for the XLE should now be up to 40.63. And the XLE is within one point of it.

The major 37.50 level should be support. And the minor 39.83 should also be support.

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 316.73. The objective for Apple should be up to 325. And yesterday's high went to 324.24 or within one point of the objective.

The minor 315.63 level should be support.

The 317 area should now be technical support. Watch to see if Apple can hold this level today. If it can, it should head higher.

WATCH LIST:

Bullish Stocks: AMZN, GOOGL, SHOP, TSLA, ADBE, DPZ, NVDA, AAPL, LULU, COUP, ADSK, SPLK, MSFT, CRM. EHTH, DOCU, PYPL

Bearish Stocks: PG, PGR, TRI, ORCL, BCE, MDLZ, FTS, TAP