September 21, 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.

CLVS settled almost $1 above the $6 strike price, so your $6 calls should have been assigned and the stock sold at that price.

This resulted in a gain of $264 if you traded the suggested 600 share lot. The return worked out to 8% for 8 days.

Friday, the S & P 37.54 points lower. The day closed out at 3,319.47.

And the range picked up as well. The range Friday was 69.87 points. This was 122% of the daily average true range, which is 57.22 points.

The expanding range is bearish. And couple that with the daily bar closing at 39% of the range for the day and the expectation is for more selling pressure.

And pre open, the S & P is trading about 56 points lower.

This projects to an open around 3,263. This would be an open about 29 points below Friday's low of 3,292.40.

Watch the 3,278 area on a bounce.

The weekly price bar closed 21.50 points lower. And as it turned out the weekly range of 136.52 points was almost the weekly average which is 137.02.

And the weekly price bar closed at 19.8% of the range of the bar.

This also suggests that the weekly low of 3,292.40 should be violated before the high of 3,428.92. And like the daily bar, the weekly bar should take out last week's low at the open.

Weekly resistance should be in the 3,360 area. And under this level there is resistance around 3,340. Also, the 3,291 could offer resistance.

I do want to point out that both last Friday and for the week, both the S & P and the VIX closed lower.

This is a divergence and usually signals that a change in direction is forthcoming.

I also want to point out that the last time this rare event occurred was on Friday April 3rd. That day, both the S & P and the VIX closed lower on their daily price bars and their weekly price bars.

The next week closed 301 points higher after that divergence.

Tomorrow we get earnings from AZO before the open. And we hear from NKE after the close tomorrow.

Thursday afternoon, we get earnings from COST.

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 25.83. For the day, the VIX closed .63 points lower.

The key again for the VIX is the midband on the daily chart. That level is 25.95 and the VIX managed to close just under it.

A break under this level and the VIX should head lower.

If the VIX holds at the midband, it should bounce which would suggest the market would reverse lower.

A break under the midband and the market should continue higher. But, with the pre market trading, I would expect a move above the midband.

The other key is the minor 25.78 level. The VIX should test 28.13.

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 3,319.47. The objective should be to the 3,281.20 level. And the market should open under it.

The 3,281 level should be resistance on a rally.

On the downside, watch the 3,242 level. This should be support.

3,388 is the midband on the 60 minute chart and the S & P should open below it. This level should now become resistance.

The short term 60 minute has turned bearish.

QQQ:

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 **
Minor level: 264.06
Major level: 262.50
Minor level: 260.94
Minor level: 257.81
Major level: 256.25

The QQQ closed at 266.87. The QQQ closed 3.45 lower.

Watch the 267.419 level. A close today under this level and the QQQ should test 262.50.

The QQQ broke under the midband on the 60 minute chart. That price level is 277 and should now be resistance.

Like the S & P, the QQQ has crossed into an downtrend on its 60 monute chart.

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 <
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 153.29, closing .40 lower. At this point, the projection is down to the 150 level.

The 151 area should provide technical support.

147 is the midband on the daily chart and should be support. And the 154 area should be technical resistance.

148.44 is the key level on the downside.

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 163.57. The 164.85 level is the key short term level.

To move higher, the TLT needs to recoup the 164.85 level. If not, a drop to 162.50 would be expected.

The TLT got to within 84 cents of the 162.50 level.

The 165 area is still technical resistance.

Short term charts remain bearish. The TLT should open higher with the market selling off.

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 183.20. The GLD closed .24 higher on the day.

Watch the 183.60 level. A close today under 183.60 and the GLD should drop to 181.25. Now, if the GLD can hold the 183.50 level it should head up to 184. At this point, biased for a test of 181.25.

Short term momentum has turned bearish. The technical resistance level is 184. If the GLD can clear 184, it should head higher.

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 33.61. 32.03 should be support. The XLE hit the 34.27 level, as expected.

Short term the XLE is oversold. It did move above the lower band on the 60 minute chart, which is now 31.90. This should be support on a retest.

Looking for a bounce, which we are getting. Technical support is around 33. Looking for a move up to the 36 area.

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 106.84. 112.50 should be resistance. And if Apple closes under 109.13 today, it could test 100.

And watch the 109.13 level for resistance.

Apple broke under the midband on the 60 minute chart. That level is 116 and should be resistance. Apple has crossed into a downtrend on the 60 minute chart. Short term momentum is bearish.

WATCH LIST:

Bullish Stocks: CHTR, ZM, AVGO, FDX, PODD, MCD, DE, DG, UNP, MMM, EDU, CAT, TT, ALXN, GH, Z, ALB, PGR, EMN, PENN, SWAV

Bearish Stocks: BDX, WAT, GS, GD, HSY, CB, TRV, CYBR, MIDD, DLTR, ADC, HSIC, UPRO, KRC, THS, HXL