November 20 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.

Before I begin, I do want to mention that there is one position that expires today. And that the short $17.50 call on PRA. Leave the position alone and if I do suggest an adjustment, I will send out a separate email.

I also want to mention that I suggested a new position on Apple. It was a $4 wide debit spread using the December 4th expiration date.

The S & P 500 opened with an 8.38 point lower gap open yesterday. From the open, the market proceeded to drop another 15.57 points to the low of the day,
which was 3,543.84.

This was about 10 points below the minor 3,554.55 level.

At that point, the market found support and rallied to the high of the day, which was 3,585.22. The S & P ended the day settling at 3,581.87.

The range for the day ended up at 41.38 points.

This was 70% of the daily average true range, which is now 59.06 points.

This now means that the market has had 8 consecutive range contractions. This tells us the longer the market contracts, larger the move when it does break out.

And the daily bar closed at 92% of the range of the daily bar. This does suggest that yesterday's high should be violated before the low.

And pre open, the S & P is trading about 5 points lower.

This projects to an open around 3,577. Support from yesterday's daily bar should be in the 3,570 area. If this level cannot hold, then look for the 3,565 area.

With all the daily contractions, the weekly price bar is also shaping up for a contraction.

The range for the week through yesterday was only 85 points, which is 61% of the weekly average true range, which is 139 points.

The midpoint is 3,586 and yesterday's close was 4.31 points below it.

So, watch to see if the market can reclaim the midpoint.

The weekly bar is forming an inside bar and a doji.

The high for the week is 3,628.51 and the low is 3,543.84.

The other key price level is 3,585, which is the close of last week's doji bar. Watch this level as well.

WDAY reported and is trading about $8 lower.

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 23.11. The VIX closed .73 points lower. The VIX got as high as 24.52 before selling off.

Watch the 24.22 level today. A close today under this level and the VIX should drop to 21.88.

Resistance on the VIX should still be at 25.00 and at the 25.78 level.

There should be strong resistance at 28.23. This is the midband on both the daily and 60 minute charts.

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 3,581.87. The S & P closed 14.08 points higher.

Watch for support at the minor 3,554.55 level again. This is the key level to monitor at the moment. Two closes under this level and the S & P should drop to 3,437.

3,585 is minor technical resistance. The S & P needs to clear this level to head higher.

Support is at 3,568.

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 292.38. The QQQ closed 2.27 higher.

The QQQ would still need two closes under 292.19 to drop to 287.50.

The 289.06 level should also be minor support. Technical support should be around 292.

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 177.31. The IWM closed 1.35 higher on the day.

Watch for support at the minor 176.56 level. And a close today above this level and the IWM should head up to 187.50.

The IWM is selling off from the upper band on the 60 minute chart. That level is 182.

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 160.09. It closed .82 higher.
The TLT managed to close above 160.16 to continue higher. this now suggests that if the TLT can close above this level, it should test 162.50.

The TLT did clear the midband on the 60 minute chart. That level now is 159.41, and it should now be support.

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 175.16. The GLD closed .33 lower on the day.

Watch the major 175 level. This is the key at the moment. A break under this level and the GLD should head lower.

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.

Technical resistance is around 176 as well.

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. The XLE closed .58 higher on the day.

The XLE needs to hold the major 34.37 level to head higher. If it breaks under this level and closes under 33.59, look for a move lower. And the low went to 34.81.

Support is at 34.37.

The XLE did close above the upper band on the 60 minute chart, which is now 36.35.

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 118.64. Apple closed $.61 higher.

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

And look for support at 115.63. There is minor technical resistance at 119. If Apple can clear this level, it should continue higher.

Apple cleared the midband on the 60 minute chart. That level is 116.67 and should now be support. This level should be strong 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