November 18, 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.

I suggested closing the CTXS debit spread yesterday. We were able to capture almost half the maximum value in 6 days, so it was time to book the profit.

Will look to replace it with another deal.

The S & P 500 paused and pulled back slightly yesterday. The day closed out 17.38 points lower.

The S & P closed out at 3,609.53.

The range for the day picked up slightly over Monday's range. Yesterday's range was 34.43 points compared with the 28.35 point range on Monday.

Needless to say, this was another range contraction. The daily average true range is now 61.08 points.

This means that yesterday was the 6th consecutive range contraction.

After a series of contractions, we expect an expansion. The only question is when?

The longer the contractions continue, the bigger the move out of the setup.

And yesterday again formed a doji bar, which as you know, can mean indecision. But, it can also mean a pause before the market continues.

The key levels to watch are the high, close, and low.

Respectively, these levels are 3,623.11, 3,609.53 and 3,588.68.

And the low for the day dropped about 5 points below the major 3,593.60 level, which we expected should be support.

Watch this level again today.

Pre open, the S & P is trading about 8 points higher.

This projects to an open around 3.617 or about 6 points below yesterday's high.

Watch to see if the S & P can clear yesterday's high of 3,623.11 on a rally. And watch the close of 3,609.53 on a sell off.

BIDU reported and it up slightly.

This afternoon we get earnings 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 22.71. The VIX closed .26 points higher. Watch the minor 22.66 level today. A break under this level and I would expect the VIX to head lower.

Resistance on the VIX should still 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 25.

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 3,609.53. The S & P closed 17.38 points lower.

The S & P managed to recoup the major 3,593.60 level. This level should be support.

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.

3,590 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 292.27. The QQQ closed .93 lower.

The objective for the QQQ should be for a test of 293.75. And yesterday's high went to 293.74. I am sure you will agree that this is close enough to say the target was hit.

At this point, look for support at 292.19 level. And the support area from yesterday's daily bar, which is around 293.

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 178.46. The IWM closed .83 higher on the day.

The objective should now be to the 187.50 level.

Support should be at 176.56 and 175.

The IWM is close to the upper band on the 60 minute chart. That level is 180.

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

176 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 158.81. It closed 1.03 higher. The TLT came to within 22 cents of the 159.38 level.

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 159.65. The TLT is making the expected bounce from the oversold condition.

Watch the midband. If the TLT cannot clear the midband, I would expect it to drop.

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 176.50. The GLD closed .65 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 178.24 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. But the GLD has crossed into a downtrend on the 60 minute chart, which suggests more selling pressure to follow.

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 36.48. The XLE closed .37 higher on the day.

Objective should be to the 37.50 level.

Support is at 34.37.

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

The XLE is still above the upper band on the 60 minute chart, which is now 35.64.

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

Don't short until a close under 35.64.

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 119.39. Apple closed $.91 lower.

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 116.50 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