MomentumOptions.com Pre-Market Update for 1/8/2019
Bulls Push Prior November Support Levels
The market showed continued strength to start the week while testing and clearing near-term and major resistance levels that served as prior support from mid-November.
Much of the strength was attributed to the beginning of the first face-to-face meeting between U.S. and China officials since both sides agreed to a 90-day truce in the ongoing trade war.
The Russell 2000 rallied 1.8% following the intraday run just south of 1,412. Fresh and lower resistance at 1,400-1,425 was cleared and held with the latter representing prior November support.
The Nasdaq was up 1.3% after reaching a midday high of 6,855 while closing above the 6,800 level. Fresh resistance at 6,850-6,900 was breached but held with continued closes above 6,800 and prior November support being a bullish signal.
The S&P 500 rose 0.7% after reaching a session peak of 2,566. The index closed just below major resistance at 2,550 and prior November support by a quarter-point with additional hurdles at 2,575-2,600.
The Dow gained 0.4% following the intraday push to 23,687 and closing at 23,531. Fresh and lower resistance at 23,600-23,800 was breached but held with a close back below 23,500 and prior November support being a slightly bearish signal.
Consumer Discretionary led sector leaders after jumping 2.3%. Energy and Communication Services rose 1.5% and 1.1%, respectively.
Utilities and Consumer Staples were the only sector laggards after giving back 0.7% and 0.1%, respectively.
The S&P 500 Volatility Index ($VIX) fell for the 7th time in 8 sessions despite testing an opening high of 22.71. Fresh resistance at 22-22.50 was stretched but levels that held.
The fade to 20.91 afterwards breached upper support at 21-20.50 but levels that held into the closing bell. A drop below 20 would signal additional market strength.
The Invesco QQQ Trust (QQQ) was up for the 4th time in 5 sessions after trading to a high of $158.85. Fresh and lower resistance at $158-$158.50 was cleared and held with a move above the latter leasing to a possible push towards $160
The $157.50 level represents prior mid-November and mid-December support. Continued closes above this level would be a slightly bullish development for a run towards $160-$162.50 and the 50-day moving average that is starting to show signs of leveling out.
Near-term support is at $157.50-$157 with a move below the latter signaling a possible retest towards $155-$152.50.
RSI is in an uptrend with resistance at 55-60 and the former representing the late November peak. A close above the latter would signal additional strength towards 65-70 and August highs. Support is at 45-40.
The Spider S&P Retail ETF (XRT) was up for the 5th time in 6 sessions following the intraday surge to $44.05. Near-term and lower resistance at $43.50-$44 was cleared and held. The death cross that formed in early December confirmed lower lows and the recovery of the $43 level was a near-term bullish signal for a possible run towards $44.50-$45 and the 50-day moving average.
Rising support is at $43-$42.50. A close below $42 would signaling additional weakness and possible short-term top.
RSI is in an uptrend with resistance at 60 and represents the November peak. A move above this level would signal additional strength towards 65-70 and August peaks. Support is at 50-45.
Monday’s continued rally was a bullish signal as long as current levels can hold for the rest of the week. Market sentiment has changed dramatically since the last trading day of December and the charts for the major indexes continues to show strength towards the 50-day moving averages.
With earnings season starting this week and in full swing over the next few weeks, other headlines news could take a backseat, or possible be settled over this time period. Estimates have been coming down for the current 4Q and I will provide an outlook later this afternoon.
We added some new trades yesterday but I apologize the was not a Text Alert. We had technical issues updating the system during the time the trades we sent but an email came out, as usual. I also wanted to mention for subscribers not getting text alerts since signing up this year or in the past, please let us know. We typically take the phone numbers from billing when subscribers signup but we also realize these could be land lines.
If you believe you are missing out, email me at Rick@MomentumOptionsTrading.com
Today’s midday update should come out between 1:30-2:30pm and I mention that in case I have new trades and if there are still gremlins in our text messaging system. We could be sending TEST messages today but I wanted to give everyone a heads-up on what is happening.
Momentum Options Play List
Closed Momentum Options Trades for 2019: 0-0 (0%). All trades are dated and time stamped for verification. New subscribers can look at the past history to see how the trades have played out or to research our Track Records. Do not risk more than 5% of your trading account on any one trade but do try to take all of the trades.
Please remember, all “Exit Targets” and “Stop Targets” are targets. You should not have any “Stops” entered to close any trades or “Limit Orders” in your brokerage account unless I list one. I will send out a “Profit Alert” or “New Trade” if I want you to close a position or if a new trade comes out. Otherwise, follow instructions at all times in the Daily updates.
New Age Beverages (NBEV, $5.47, up $0.05)
NBEV February 6 calls (NBEV190215C00006000, $0.50, up $0.05)
Entry Price: $0.50 (1/7/2019)
Exit Target: $1.00
Stop Target: None
Action: Shares traded to a high of $5.70 with resistance at $5.75-$5.80 holding. A move above the latter gets $6+ back in play. Support is at $5.30-$5.25.
Consumer Staples Select Spiders (XLP, $51.19, down $0.07)
XLP February 53 calls (XLP190215C00053000, $0.48, up $0.01)
Entry Price: $0.52 (1/7/2019)
Exit Target: $1.05
Stop Target: None
Action: Shares made a run to $51.53 intraday with lower resistance at $51.50-$52 holding. Support is at $51-$50.50.
Imax (IMAX, $19.66, up $0.35)
IMAX February 18 puts (IMAX190215P00018000, $0.45, down $0.05)
Entry Price: $0.60 (1/3/2019)
Exit Target: $1.20
Stop Target: None
Action: Fresh resistance is at $19.75-$20 held following Monday’s trip to $19.93. Rising support is at $19.25-$19. I still like the trade as long as $20 holds going forward.