November 17, 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 S & P 500 continued its rally based on the announcement of the 95% success rate of the Moderna Covid 19 trials.

For the day, the S & P 500 closed 41.76 points higher. The day closed out at 3,626.91.

Yesterday's high was 3,628.51. This put the market to within 4.14 points of the minor 3,632.65 level.

Watch this level today. This is the next key level for the S & P.

This is for a few reasons.

The first reason is because after taking out the major 3,593.60 level, the next minor level often acts as resistance.

The second reason is that if the S & P closes the minor 3,632.65 for two consecutive days, then the objective for the S & P becomes 3,749.80.

But, the major 3,593.60 level should be support at this point. As well as the minor 3,554.55 level.

I do need to mention that the upper band on the daily chart is now 3,852.18 and is about 100 points above the resistance level. And typically, the upper band is the target after clearing the midband.

But, the market is getting overbought. I say this because the bullish percent index is now reading 79.20%. As you know, 80% is overbought and is just under that level.

As I have mentioned on a few occasions, this index can be overbought for a while before the market turns.

But, it does give us a warning.

The support area from yesterday's daily bar is in the 3,614 area. And with the daily bar closing at 94% of the range of the daily bar, the expectation is still that the high should be violated before the low.

But, we did have another contraction day. This was the 5th consecutive contraction.

This does precede an expansion.

Pre open, the S & P is trading about 26 points lower. This would put the market right around yesterday's low, which is 3,600.16.

Watch the low. A break of the low would suggest that the daily levels would be resistance.

And the open gap, which is at 3,594 should be support.

And watch the weekly close which was 3,585.15.

This afternoon, we get earnings from BIDU. Wednesday after the close, we hear from NVDA.

And Thursday after the close, we get earnings from NTES, WORK, and INTU.

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 **
Minor level: 22.66
Major level: 21.88

The VIX closed at 22.45. The VIX closed .65 points lower.

Resistance on the VIX should be at 24.22 and at the 25 level.

And the VIX is still below the midband, which is 28.10. This level should still be resistance.

And technical resistance is at 24.

Still biased for a move lower. Wait for the VIX to reverse lower to go long.

S & P 500:

Major level: 3,749.80
Minor level: 3,710.75
Minor level: 3,632.65 **
Major level: 3,593.60 <
Minor level: 3,554.55 **
Minor level: 3,476.45
Major level: 3,437.40
Minor level: 3,398.35
Minor level: 3,320.25
Major level: 3,281.20
Minor level: 3,242.15
Minor level: 3,164.00
Major level: 3,125.00
Minor level: 3,085.95
Minor level: 3,007.85
Major level: 2,968.80

The S & P closed at 3,626.91. The S & P closed 41.76 points higher.

The S & P will need two closes above 3,632.65 to confirm a move up to 3,749.80.

And the S & P should open above the major 3,593.60 level. Look for support around this level, with a projected open about 7 points above it.

3,580 should be a technical support level.

QQQ:

Minor level: 295.31
Major level: 293.75 <
Minor level: 292.19
Minor level: 289.06 **
Major level: 287.50
Minor level: 285.94
Minor level: 282.81
Major level: 281.25
Minor level: 279.69
Minor level: 276.56
Major level: 275.00
Minor level: 273.44
Minor level: 270.31
Major level: 268.75

The QQQ closed at 293.20. The QQQ closed 2.27 higher.

The objective for the QQQ should be for a test of 293.75.

Like the S & P, the QQQ took out the midband on the 60 minute chart. This level should now be support. The midband is 284.

292 should be support from yesterday's daily bar.

IWM:

Major level: 187.50
Minor level: 181.25
Minor level: 176.56 **
Major level: 175.00
Minor level: 173.44
Minor level: 170.31
Major level: 168.75
Minor level: 167.19
Minor level: 164.06
Major level: 162.50
Minor level: 160.94
Minor level: 157.81
Major level: 156.25
Minor level: 154.70

The IWM closed at 177.63. The IWM closed 4.13 higher on the day.

With a close above the minor 176.56 level today, the objective should be to 187.50. The uppper band on the daily chart is 192.

Support should be at 175 and 173.44.

The IWM took out the upper band on the 60 minute chart. That level is 178.60.

The IWM is retesting the upper band as we expected. Watch this level.

173 should be technical support.

TLT:

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: 155.47 **
Minor level: 153.91
Major level: 153.13

The TLT closed at 157.78. It closed .38 lower. Watch to see if the TLT can hold the 157.03 level. And it did. This suggests a move up to 159.38.

The TLT would still need two closes under 155.47 to drop.

The TLT is oversold and is at the lower band on the 60 minute chart. That level is 153.84. The TLT is making the expected bounce from the oversold condition.

160 should be technical resistance and is the midband.

GLD:

Minor level: 188.28
Major level: 187.50
Minor level: 186.72
Minor level: 185.16
Major level: 184.38 <
Minor level: 183.60
Minor level: 182.03
Major level: 181.25
Minor level: 180.47
Minor level: 178.91 **
Major level: 175.00 <
Minor level: 174.25 **
Minor level: 172.70
Major level: 171.89

The GLD closed at 177.15. The GLD closed .01 lower on the day.

The GLD recouped the 175 level. Watch the minor 178.91 and 174.25 levels.

The GLD is back under the midband on the 60 minute chart. This level is 178.20 and should be resistance. A drop to the lower band, which is 173 should be the objective.

If the GLD can clear the midband, then expect a move higher.

XLE:

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: 34.37 <
Minor level: 33.59
Minor level: 32.03
Major level: 31.25
Minor level: 30.47
Minor level: 28.90
Major level: 28.13

The XLE closed at 36.11. The XLE closed 2.23 higher on the day.

The XLE not only took out the 34.37 objective, but managed to close above the minor 35.15 level.

This now suggests two things. The first is if the XLE can close above the 35.15 level today, it should test 37.50.

And the second is that the 34.37 and 33.59 levels should be support.

The XLE did clear the upper band on the 60 minute chart, which is now 34.90.

This tells us the XLE is overbought short term and to expect a rally to the upper band after it closed back inside it.

AAPL:

Minor level: 140.63
Major level: 137.50
Minor level: 134.38
Minor level: 128.13
Major level: 125.00
Minor level: 121.88
Minor level: 115.63 **
Major level: 112.50
Minor level: 109.13
Minor level: 103.13
Major level: 100.00

Apple closed at 120.30. Apple closed $1.04 higher.

The objective for Apple should still be up to the 125 level.

And look for support at 115.63. And technical support around 119. A break under 119 and Apple should test 116.

Apple cleared the midband on the 60 minute chart. That level is 116 and should now be support.

WATCH LIST:

Bullish Stocks: LRCX, ASML, RH, ANTM, RNG, MLM, PEN, ULTA, ACN, CMI, KLAC, V, MCK, CAT, FIVE, ALXN, KEYS, ETN, DVA, ABC, MNST, SHAK,

Bearish Stocks: BIIB, EHTH, INTC, ARCH, SPDN, SUM