MomentumOptions.com Pre-Market Update for 2/1/2017

Apple (AAPL) Beats/ Shares Up

8:00am (EST)

The bears pushed lower lows into Tuesday’s action but the rebound off near-term support levels continued to keep the current trading ranges intact. The bulls managed a decent January but February will be a tricky month to trade as earnings start to take a backseat.

Apple’s numbers after the close yesterday came in better-than-expected with shares up and north of $125 in after-hours trading. This could provide some relief from last Friday’s ongoing overall market slide along with continued strength in the Drug stocks.

The Dow fell 107 points, or 0.5%, to end at 19,864. The blue-chips traded underwater again on Tuesday with the low reaching 19,784. Support at 19,900-19,800 was breeched but held into the closing bell. A close below the latter gets 19,700-19,600 and the 50-day moving average in play. Resistance is at 20,000-20,150.

The S&P 500 slipped 2 points, or 0.1%, to finish at 2,278. The index tested 2,267 a low of 2,267 intraday with lower support at 2,275-2,270 getting extended for the second-straight session. A close below the latter will likely lead to 2,250-2,245 and the 50-day moving average over the near-term. Resistance is at 2,285-2,300 and the index came within 2 points of trading in the green yesterday.

The Nasdaq added a point, or 0.02%, to settle at 5,614. Tech hit its weakest point midday with the low reaching 5,576 and lower support at 5,625-5,575 holding. A move below the latter could led to additional weakness to 5,500-5,000. Resistance is at 5,650-5,675 easily held following the trip to 5,615 ahead of the final bell. The fifth-straight close above 5,600 remains a bullish signal.

The Russell 2000 jumped 9 points, or 0.7%, to close at 1,361. The small-caps were weak the first hour of action with the low reaching 1,345. Upper support at 1,345-1,340 held with choppy action until the final hours of trading. The surge to 1,363 and session highs afterwards was beautiful along with the close back above the 50-day moving average. Resistance is at 1,365-1,370 followed by 1,380-1,385.

The S&P 500 Volatility Index ($VIX, 11.99, up 0.11) split resistance at 12.50-13.50 following the midday run to 12.99. Support is at 11.50-11 followed by 10.50-10.

I have updated the parameters of our bullish IWM call option position and I could have another New Trade for today’s Mid-Market Update.