November 24, 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 managed to close 20.05 points higher on the day. The S & P closed at 3,577.59. And the low for the day was 3,552.77.

The low dropped 1.78 points below the minor 3,554.55 level, which as I have been writing about recently, should be support.

As a refresher, the 3,554.55 level is the minor level under the major 3,593.60 level.

The S & P would need two closes under 3,554.55 to drop to 3,437.40.

The question is this ... why have we been biased for support at the 3,554.55 level?

I am tempted to leave the answer for tomorrow. And I think I will.

If you have an answer to this question, please email me at davismdt@gmail.com with your response.

I will name the members (first names only) who submit the correct answer. And I will share my answer as well.

Anyway, we have been looking for support at the minor 3,554.55 level.

Thursday's low actually dropped 10.71 points below it, before the market closed above it.

And Friday's low dropped to 2.30 points above it. Yesterday's low dropped 1.78 points under.

And yesterday and Friday, both closed above it.

The range for the day was 37.04 points, which was 67% of the daily average true range.

This was the 10th consecutive range contraction.

And the day closed at 67% of the range of the daily bar, which suggests the high should be violated before the low.

Pre open, the S & P is trading about 28 points higher. This projects to an open around 3,605 or about 16 points above yesterday's high of 3,589.81.

So, the close projection should be satisfied right at the open.

Support should be around the midpoint of the projected gap, which should be 3,598. If this level does not hold, support should be around the high, which was 3,589.81.

On a move higher, watch last week's high, which was 3,628.51. If the S & P can take out last week's high, it should continue higher.

BIDU reported and is trading about $1 higher. NVDA reports Wednesday after the close.

And INTU and WDAY report Thursday after the close.

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 22.66. The VIX closed 1.04 points lower.

The VIX closed right on the minor 22.66 level. And a close today under 24.22 and the VIX should drop to 21.88.

Watch the 24.22 level today. This level should still be resistance. And on the downside, watch the 22.66 level.

A break under 22.66 and the VIX should test 21.88.

Resistance on the VIX should still be at 25.00 level.

There should be strong resistance at 27.90. 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 3,577.59. The S & P closed 20.04 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. And the market should open above it, so it should be support on a pullback.

Support is at 3,572.

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 290.30. The QQQ closed .01 higher.

Watch the 292.19 level. The QQQ needs to regain this level to move higher.

The upper band on the weekly chart is 291.98 and the QQQ is just under it. Watch to see if it can clear it.

The 289.06 level should also be minor support.

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 180.82. The IWM closed 3.32 higher on the day.

The objective for the IWM should be to 187.50.

I am looking for a retest of the upper band on the 60 minute chart. That level is 184.

178 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 160.77. It closed .74 lower.

Biased for a test of 162.50. Watch for support at 160.16.

The TLT did clear the midband on the 60 minute chart. That level now is 159.30, 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 172.23. The GLD closed 3.46 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 broke as we expected.

And it did hit the major 171.89 level. Watch this level today.

The GLD is now oversold. It is right at the lower band on the 60 minute chart. That level is 172.25. Watch to see if this level can hold today.

Technical resistance is around 174 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 38.34. The XLE closed 2.53 higher on the day.

With a close today above 38.28, it should head up to 40.63.

Support is at 37.50.

The XLE did close back above the upper band on the 60 minute chart, which is now 38.07.

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 113.85. Apple closed $3.49 lower.

The objective for Apple should still be up to the 125 level. And support should be at 112.50.

Apple did break under the midband on the 60 minute chart. That level is 116.74.

Short term, Apple is oversold. Look for an adjustment to the debit spread.

WATCH LIST:

Bullish Stocks: TTD, TSLA, RH, LRCX, MSCI, CTAS, ZBRA, PODD, ROKU, ADSK, KLAC, URI, EDU, MMM, CAT, CBRL, DIS, XLNX, AAXN, KEYS

Bearish Stocks: AEP, BLUE, NRG, CHL, LMNX, FE