September 11, 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.

Yesterday, I suggested two new positions. The first was a weekly covered call on CLVS.

The alert suggested buying CLVS and selling the $6 call that expires next Friday.

The second alert was an uneven straddle on QRVO. The alert was biased to the short side and uses the October monthly options.

Yesterday, the S & P reversed back to the downside and closed lower on the day.

The day closed out 59.77 points lower. The S & P closed out at 3,339.19. The close percentage from Wednesday was 55%, which means there was a slight bullish bias.

After gapping higher at the open, the S & P ran into resistance at 3,425.55, which was the high for the day.

After stalling at the high, the S & P proceeded to drop the balance of the day, to a low of 3,329.25.

As it turned out, the S & P had a range of 96.30 points. This was another expansion, with the range exceeding the daily average true range. The range was 165% of the daily average, which is now 58.50 points.

And the daily bar closed at 10% of the range of the daily bar. This does suggest that yesterday's low of 3,329.25 should be violated before the high of 3,425.55.

This also suggests that resistance from yesterday's daily bar should be in the 3,375 to 3,377 area.

Pre open, the S & P is trading about 25 points higher.

This projects to an open around 3,364, which is about 11 to 13 points under yesterday's resistance level. Watch those levels on a rally.

In taking a quick look at how the weekly price bar is shaping up, there are a couple of comments I want to make.

The first is that the range for the week, so far, is 96 points. This is 71% of the weekly average true range, which is 136 points.

The second comment is that the midpoint is 3,377 and today open should be about 13 points below it. I would also like to point out that the weekly midpoint is also equal to the upper end of the daily resistance level.

So, this should be a key level today.

And finally, the open for the week was 3,371.88. This is also a key price level. A close above the weekly midpoint would be bullish. Also, last week's low was 3,349.63.

If the market does sell off against the 3,337 level, it could make a run back to last week's low.

PTON reported last night and is trading about $10 higher.

I would be remiss not to mention that today is the 19th anniversary of the 9/11 attacks that took down the World Trade Center.

This is a particularly tough day as I live about 10 miles from ground 0. The impact on our area was immense.

I can still remember the smell that came from the site. It lasted for about a month. It is just something I will never forget.

My thoughts and prayers go out to those families that lost loved ones in the strike.

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 29.71. For the day, the VIX closed .90 points higher.

At this point, the minor 30.47 level should be resistance. And with a close under 30.47, this suggests a rop to 28.13.

Technical resistance is right around 30. The VIX would need to clear this level to head higher.

The midband on the daily chart is 25.67 and with the VIX above it, this level should be support.

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 3,339.19. With the S & P back under the 3,398.35 level, a close today under it and the S & P should drop to 3,281.

Watch the 3,398 level if the S & P can clear the daily resistance level,

3,320.25 should be a support level.

3,367 is also a key level today. This is the midband on the 60 minute chart. And the market should open right at it. So, watch how the market reacts.

QQQ:

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
Minor level: 273.44 **
Minor level: 270.31
Major level: 268.75
Minor level: 267.19

The QQQ closed at 272.34. The QQQ closed 5.54 points lower.

Watch the minor 273.44 level today. A close today below it and the QQQ should test 268.75.

If the 273.44 level can hold, look for a move up to 275.

275 also happens to be the midband on the 60 minute chart. So, watch this level.

Also, support from yesterday's daily bar is in the 277 area.

IWM:

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 HIT
Minor level: 148.44
Minor level: 145.31
Major level: 143.75
Minor level: 142.19
Minor level: 139.06
Major level: 137.50
Minor level: 135.94

The IWM closed at 150.15, closing 1.98 lower. Watch to see if the IWM can hold the 150 level.

153 is the midband on the 60 minute chart and the IWM is just under it. It will need to clear this level to head higher.

The 150 area should provide technical support.

TLT:

Major level: 171.88
Minor level: 171.10
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

The TLT closed at 164.13, closing .83 higher. Watch to see if the TLT can hold the minor 163.28 level. If it can, it should make a run to 165.63.

Technical resistance is now around 166. And also around 165. Watch this area.

Short term charts remain bearish.

GLD:

Major level: 190.63
Minor level: 189.85
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

The GLD closed at 182.46. The GLD closed .59 lower on the day. Biased for a test of the 184 level. And the GLD got to 184.68.

Watch the 183.60 level. A close today under this level and the GLD should drop to 181.25.

Short term momentum has turned bearish. The technical resistance level is 183.70.

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 HIT
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 32.59. Watch the minor 33.59 level. A close today under this level and the XLE should drop to 31.25.

Short term the XLE is oversold. It is under the lower band on the 60 minute chart, which is now 33.10.

AAPL:

Major level: 150.00
Minor level: 146.88
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

Apple closed at 113.49. Apple closed 3.83 lower. Watch to see if Apple can hold the 112.50 level.

Also, Apple closed under the upper band on the daily chart. That price level is 124.90 and should now be resistance.

Technical support is right at 121. 113.25 is the midband on the 60 minute chart and Apple is trading right at it. Watch to see if it can hold.

WATCH LIST:

Bullish Stocks: ORLY, ZM, AVGO, FDX, MMM, CAT, NLE, ALXN, ZEN, ALB, CHWY, KR, DKS, WMGI

Bearish Stocks: BDX, BIB, BA, IBM, CB, TRV, DLTR, LW, CVS, PSX, VLO, OMC, HSIC, EOG, KEX, WBA, NBR, FANG, JBL, CSOD