November 3, 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.

Of course, today is the long-awaited election day here in the United States. And we have been getting a pre-market bounce. The question is will it continue after the election results are known?

And yesterday the S & P 500 closed 40.28 points higher. The market closed the day out at 3,310.24.

The S & P is trying to bottom after pivoting at 3,233.94 on Friday.

The last swing began with the high at 3,549.85 on October 12th. And Friday's low stopped at 3,233.94.

If you measure this swing, the range comes to 315.91 points.

I know I tend to mention and use the resistance levels that I share daily. But, understanding the implications of the levels can be a difficult thing to learn and apply.

I have always said you expect counter moves to go no more than two levels. And moves with the trend will tend to go three levels.

Each level measures 156 points. So, this last downswing dropped 315.91 points. A two-level move is 312 points. So, this last downswing dropped 3.91 points over the two-level measurement.

So, the market has dropped the amount I would expect. This does not mean that every counter swing will go exactly two levels.

It is just that I don't expect it to go more than two levels. The market could drop less than two levels on a pullback.

But it gives you areas where to look for reversals.

Yesterday's daily price bar closed at 61% of the range of the daily bar. This suggests the odds of violating yesterday's high of 3,330.14 should made before violating the low of 3,279.74.

And the support area from yesterday's daily bar is in the 3,304 area.

Pre open, the S & P is trading almost 40 points higher.

This projects to an open around 3,350 or about 20 points above yesterday's high. So, the close percentage projection should be satisfied right at the open.

Watch for support around 3,340 or about one half the projected gap. Under this level, expect support at the prior daily high of 3,330.

Watch the weekly resistance levels, which is the midpoint, which is around 3,338. Above this level, there is resistance at 3,355.

And the monthly level of 3,392 should still be a key level on a rally.

Finally, watch to see if the S & P can clear the upper bollinger band on the monthly chart. That level is 3,314.

PYPL reported and is trading $10 lower. SWKS reported and is down about $2.

This morning, we hear from W and ZBRA.

Wednesday after the close, we get earnings from QCOM and MELI.

And Thursday morning, we hear from BABA, BDX, and REGN. After the close on Thursday, we hear from BIDU and BKNG.

Here are the Key Levels for the Markets:

$VIX:

Minor level: 41.40
Major level: 40.62
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
Minor level: 27.35
Minor level: 25.78
Major level: 25.00

The VIX closed at 37.13. The VIX closed .89 points lower.

The VIX got as high as 38.78 before closing under the 37.50 level.

The next minor level on the upside is 38.28. The VIX needs to close above this level to continue higher.

On the downside, watch the minor 36.72 level. A break under this level and the VIX should head lower.

The VIX closed under the upper band on the 60 minute chart. That level is now 38.31 and should be resistance.

S & P 500:

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 3,310.24. The S & P closed 40.28 points higher. This erased the losses from Friday.

The market should open above the 3,320.25 level. This should be support.

Technical support is around 3,290, which is right at the minor support level.

QQQ:

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 269.98. The QQQ closed .60 higher. Watch the 270.31 level. Two closes above this level and the QQQ should test 275.

Watch for support at the 268.75 level.

279 is the midband on the 60 minute chart and should be resistance.

Technical support is at 267.

IWM:

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 **
Minor level: 151.56
Major level: 150.00
Minor level: 148.44
Minor level: 145.31
Major level: 143.75

The IWM closed at 155.82. The IWM closed 2.73 higher on the day.

The IWM recouped the minor 154.70 level. Watch to see if the IWM can clear 156.25 today.

The midband on the 60 minute chart which is 155.60. Watch this level. The IWM closed just above this level. It should be support.

154 should be technical support.

TLT:

Minor level: 169.53
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

The TLT closed at 158.58. It closed 1.18 higher. The TLT closed just below the minor 159.60 level. The TLT needs to clear the minor 158.60 level to head higher.

Biased now for a drop to 156.25.

159 should be technical resistance.

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 177.91. The GLD closed 1.71 higher on the day.

The next level on the upside is 178.91. Two closes above this level and the GLD should test 181.25.

The GLD needs to clear 179 to head higher. This level should still be resistance.

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 29.70. The XLE closed .98 higher.

The key now on the upside is the minor 28.90 level. The XLE needs to close above this level to head higher. If it can, it should head up to 31.25.

This countermove should go to around the 30.50 area. And the XLE needs to clear this level to head higher.

The 29.00 area should be technical support.

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 108.77. Apple closed $.09 lower.

Watch the minor 109.13 level. A close today under this level today and Apple should drop to 100.

Apple broke under the midband on the 60 minute chart. That level is 115. this level should now be resistance.

107 is technical support. If Apple can hold this level, it could reverse.

WATCH LIST:

Bullish Stocks: PEN, RMD, FIVN, UTHR, FFIV, XLNX, GRMN, YY, GRMN, PDD, FSLR, JD, BG, SCCO, LSCC, GO, IQ

Bearish Stocks: LMT, NOC, ULTA, BURL, LHX, GPN, CME, BA, ZBH, GD, WEX, DIS, IT, IBM, UHS, MDT, GWRE, FISV, DRI, CBOE, TRU, BAX