September 2, 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 march up to the 3,593.60 objective continues. Yesterday's high of 3,528.03 put the S & P 500 within 66 points of the new objective.

And the market managed to close the day 26.34 points higher. The day closed out at 3,526.65.

And the day closed out at 96% of the range of the daily price bar. This put the odds of violating yesterday's high before the low of 3,494.60.

The support area from yesterday's daily price bar is in the 3,511 area. Above that level, there is support around 3,517.

Monday closed at 33% of the range of the daily bar which suggested the odd favor violating Monday's before the high.

As it turned out yesterday, the S & P made a run to Monday's low of 3,493.25 before reversing to the upside.

After failing to take out the low, the S & P reversed and headed back up to make a new daily high.

Yesterday's daily range actually slightly exceeded the daily average true range. The daily range was 33.43 points and the daily average true range is 32.53.

So, after three days of failing to hit the daily average, the market finally hit it.

I keep pointing out the contractions because they usually lead to an expansion.

Pre open, the S & P is trading about 20 points higher.

This would project to an open around 3,546 or about 18 points above Tuesday's high. This would satisfy the closing percentage projection right at the open.

Support on the projected gap would be around 3,537. If that level cannot hold on a pullback, watch for support around yesterday's high of 3,528.

I also want to point out that last week's high has already been cleared. This satisfies the weekly close percentage.

I also need to mention that the S & P is approaching the upper band on the weekly chart. That price level is 3,603.28. The S & P is now within 75 points of the upper band.

Also, I want to note that the upper band on the weekly chart is close to the price objective of 3,593.60.

ZM had an incredible post-earnings move. ZM ended up closing 40.78% higher. It was up $132.59 on the day.

It is well above the upper band on its daily chart. Not a time to go long. Wait for a pullback.

This afternoon, after the close, we hear from CRWD.

And Thursday, after the close, we get earnings from AVGO, DOCU, and RH.

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 Midband
Minor level: 24.22
Minor level: 22.66
Major level: 21.88
Minor level: 21.10
Minor level: 19.53
Major level: 18.75

The VIX closed at 26.12. The VIX closed .29 points lower for the day.

The VIX closed just above the midband, which is 25.35. With a projected higher open this morning, watch the midband on the VIX.

A break under this level and it should continue lower.

24 is a technical support level. And technical resistance is around 27.

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 3,526.65. The objective should still be up to the 3,593.60 level.

This suggests that the 3,476.45 level should be support. And support is at 3,457.

Watch the next minor level of 3,554. The market should open just above it and I would expect it to support.

Technical support is around 3,507.

QQQ:

Major level: 306.25
Minor level: 304.69
Minor level: 301.56 **
Major level: 300.00 < HIT
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

The QQQ closed at 299.92. The QQQ closed 5.04 higher on the day. The QQQ hit the 300 objective already. Yesterday's high was 300.04.

The upper band, which is 293.80. With the QQQ above this level, it should be support.
The next minor level is 301.56. Two closes above this level and the QQQ should test 306.25.

Support should be at 298.44. And technical support is around 296.

IWM:

Major level: 162.50
Minor level: 160.94
Minor level: 157.81 **
Major level: 156.25 HIT
Minor level: 154.70
Minor level: 151.56
Major level: 150.00
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 157.21, closing 1.78 higher. The IWM reversed back up.

At this point, it will need two closes above 157.81 to move up to 162.50.

Watch to see if the IWM can close above 157.81. The 156.25 level should be 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 Target Hit!
Minor level: 161.72 **
Minor level: 160.16
Major level: 159.38

The TLT closed at 163.86, closing 1.85 higher. Watch to see if the TLT can hold the 163.28 level. If it can close above this level, it should test 165.63.

Technical resistance is now around 167. Short term trends remain bearish. But, short term the TLT is oversold and bounce should be expected. And is bouncing as expected.

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 HIT
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 185.05 The GLD closed .22 higher in the day. This brings the GLD to above the major 184.38 level.

Watch the minor 185.16 level. If the GLD can close above this level, it should test 187.

The upper band is 192 and should now be resistance.

The 183 area should be a technical support level.

XLE:

Minor level: 44.53
Major level: 43.75
Minor level: 42.97
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

The XLE closed at 35.41. The objective should be down to 34.37. And the XLe got ot within 60 cents of it.

Watch the minor 35.15 level today. If the XLE can hold it, it should head higher.

Technical resistance is still at 37. I do expect a short term bounce.

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 134.18. Apple closed 5.14 higher. Watch the major 137.50 level.

If Apple can clear 137.50, it should be support.

The upper band is 121 and should be support. 129 should be technical support.

WATCH LIST:

Bullish Stocks: AMZN, TSLA, GOOGL, NVDA, AAPL, NTES, LULU, MA, COST, INTU, AVGO, RH, ZM, FB, BABA, HD, CRM, WDAY, V, MSFT, DE, KLAC, PYP:

Bearish Stocks: BDX, MLM, ATO, ES, DUK, AEP, EHTH, CMS, WUBA, HES, KEX