September 25, 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 did suggest a weekly covered call position on HOG. The idea was to buy HOG and sell the weekly $24 call that expires next Friday. HOG is oversold and if this call expires worthless, I will continue to sell more calls against the stock position.

The S & P managed to close slightly higher on the day. The S & P closed at 3,246.59. This was a gain of 9.67 points.

And the daily range was 69.25 points. This did exceed the daily average true range. The Daily average is now 61.72 points, so yesterday's range was 112% of yesterday's range.

Yesterday, the S & P closed at 54% of the range of the daily bar. This is marginally bullish.

So, the key levels to watch from yesterday's daily bar is 3,244. The close of 3,246.59 is also key.

The key level on the downside is around the 3,228 area. If this level cannot hold, a test of yesterday's low would be possible. Yesterday's low was 3,209.45.

Pre open, the S & P is trading about 10 points lower.

This projects to an open around 3,236, which is also a support area from yesterday's daily price bar.

A break under this level would suggest a test of the 3,228 area.

The midpoint of the weekly price bar through yesterday is 3,266. And the projected open should be about 30 points below it.

A close under the midpoint would be bearish. And the weekly price bar has made a lower high and lower low already, so with a close under the midpoint ... and last week's close of 3,340.97, it would extend the short term bearish trend.

This would be the fourth consecutive lower weekly close.

As I pointed out on this week's webinar, the daily trend for the S & P is bullish, so I do expect a rally once support holds for the market.

I also want to point out the DOW is already back to the midpoint on its daily chart. And the IWM is also right at its midband.

The S & P and the NASD are still well above their midbands.

COST reported last night and is trading about $7.50 lower.

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 28.51. For the day, the VIX closed .07 points lower.

The VIX managed to close above the major 28.13 level again. Watch the 28.91 level.
Two closes above this level and the VIX should head up to 31.25.

The key now will be if the VIX can hold the midband on the daily chart. It closed just above it once again.

That level is now 26.15. Yesterday's low held just above the midband.

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 3,246.59. The key for the S & P for today will be the 3,242.15 level. The S & P will still need two closes under the minor 3,242.15 level to drop to 3,125.

Watch this level today. The S & P should open under it.

The S & P is still just above the lower band on the 60 minute chart. That level is 3,204.
You should know the patterns around the lower band, so I will not repeat them.

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 265.39. The QQQ closed 1.23 higher.

Watch the minor 264.06 level today. A close today above this level and the QQQ should test 268.75.

The QQQ broke under the midband on the 60 minute chart. That price level is 277.50 and should now be resistance.

The lower band on the 60 is 253.20 and should be the objective.

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 144.07. The IWM closed flat on the day.

It closed just under the midband, which is 145.97. And the daily bar formed a doji. How the market trades today, should tell us whether the market holds support or continues lower.

144.77 is the lower band on the 60 minute chart and the IWM took that out as well. The IWM is oversold.

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 165.12. It closed 63 cents higher.

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

The 165 area is still technical resistance. This is the key area at the moment.

Short term charts remain bearish.

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 < HIT!
Minor level: 174.25
Minor level: 172.70
Major level: 171.89

The GLD closed at 175.44. The GLD closed .65 higher on the day.

The GLD did drop to the 175 level, as we expected. If the GLD can hold this level, I would expect a bounce.

The GLD is at that lower band on the 60 minute chart. That level is 173.23. Watch to see if it can hold.

Oversold and due for a bounce.

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 30.20. If the XLE closes under 30.47 today, it should drop to 28.12. A drop to 28.12 iis possible, but the XLE is oversold and could bounce before that move.

Short term the XLE is oversold. It did move above the lower band on the 60 minute chart, which is now 29.24. This should be support on a retest.

Looking for a bounce at the lower band.

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 108.22. Apple managed to close $1.10 higher.

Watch to see if Apple can regain the 109.13 level, If it not, a drop to 100 should be possible.

Apple broke under the midband on the 60 minute chart. That level is 117 and should be resistance. Apple has crossed into a downtrend on the 60 minute chart. Short term momentum is bearish.

The lower band is 99 and that should be the objective.

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