October 22, 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.

After the bounce on Tuesday, the S & P 500 managed to close 7.56 points lower yesterday. The market closed the day out at 3,435.56.

The daily bar did not form a double inside bar formation because yesterday's low took out Tuesday's low.

Yesterday's low was 3,433.06, which was 2.59 points lower than Tuesday's low of 3,435.65.

But, the trading range was within the range of Monday's long-range candle.

This suggests that the resistance level from Monday's long-range candle, which is around 3,460 is still valid.

In fact, yesterday's high managed to take out this level by about 5 points, before selling off to close under it.

So, this is still a valid area to watch for resistance.

Pre open, the S & P is trading about 6 points lower. This projects to an open around 3,430.

On a bounce, watch the 3,435 area for resistance.

On the downside, the 3,400 area should still be a valid support area.

The market has now had two contractions after Monday's long-range candle. I expect we will see an expansion. Perhaps today, if not tomorrow.

Last week's low of 3,483.81 is also a key area at the moment.

TSLA reported last night and is trading about $17 higher. And CMG is trading about $68 lower after reporting.

The week ends with AMZN reporting today after the close, along with INTC.

Here are the Key Levels for the Markets:

$VIX:

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
Minor level: 21.10

The VIX closed at 28.65. The VIX closed .70 points lower. Watch the 28.91 level again today. I would expect resistance at this level.

And if the VIX can break under this level, it should head lower.

It is now back above the midband, which is 26.94 and should now be support.

The minor technical level is 28. Watch this level today.

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 3,435.56. The S & P continues to trade right around the major 3,437.40 level.

Watch the minor 3,398.35 level on the downside again. It should be support. And two closes under this level and the S & P should drop to 3,281. But, I would expect support there.

Also, watch the minor 3,418 area today on a sell off.

Technical support is right at 3,402. With the 60 minute chart crossing into a bull trend, I would expect a rally. This is the midband on the 60 and I would expect this level to hold. This level is right around the monthly support level.

If it can't, I would expect lower prices to follow.

QQQ:

Major level: 300.00
Minor level: 298.44
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

The QQQ closed at 284.19. The QQQ closed .22 lower. Watch the 285.94 level today. If the QQQ cannot reclaim this level, I would expect a drop.

Daily support is around 284.

The 289.06 should now be resistance.

Like the S & P, the QQQ crossed into an uptrend on its 60 minute chart. And the midband is 280.00 and should be support.

IWM:

Major level: 168.75
Minor level: 167.19
Minor level: 164.06
Major level: 162.50 < HIT
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 159.38. The IWM closed 1.38 lower on the day.

Watch the 160.94 level today. The IWM needs to recoup this level to head higher. But, a drop to test 156.25 is the most logical scenarion at this point.

The IWM has already crossed into an uptrend on the 60 minute chart. 155 is 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 < HIT
Minor level: 158.60 **
Minor level: 157.03
Major level: 156.25

The TLT closed at 158.70. It closed .55 lower.

The next minor level is 158.60. Two closes under this level and the TLT should drop to 156.25. But, I do expect support here.

158 is also technical 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 180.60. The GLD closed 1.35 higher on the day.

The key at the moment is 180.47. If the GLD cannot recoup this level, it should drop to 175. And yesterday, the GLD managed to close above it. Watch this level again today.

The GLD gapped above the midband on the 60 minute chart. This level should now be support, which is 180. A break under it and the GLD drops.

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: 28.12 <

The XLE closed at 29.33. The XLE closed .57 lower. Looking for a move down to the 28.12 level.

Watch the 30.47 level today. The XLE would need to reclaim this level to head higher.

The 27.00 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 116.87. Apple closed $.64 lower.

Watch the minor 115.63 level again today. If Apple can hold this level, it should head up to 125.

Apple took out the midband on the 60 minute chart. This level is 116.36 and should now be support. A break under this level and expect Apple to head lower.

WATCH LIST:

Bullish Stocks: MELI, ZM, NOW, ROP, RH, POOL, CTAS, ALGN, COUP, FDX, DE, DOCU, WDAY, ADSK, MCD, VRSK, PYPL, BAND, TSCO, ETSY

Bearish Stocks: NOC, LHX, CBOE, MRK, RCL, CPA, VLO, CF, LYFT