MomentumOptions.com Pre-Market Update for 11/5/2020
Bulls Run Winning Streak to 3-Straight
Wall Street extended its winning streak to three-straight sessions despite the Presidential race still undecided. Technology led the major indexes higher as election results from a number states still remain unsettled.
The preliminary results confirmed there wouldn’t be a blue wave, or Democratic sweep, of all three branches of government as the Republican held the Senate.
The Nasdaq reached an intraday peak of 11,663 before ending at 11,590 (+3.9%). Prior and lower resistance at 11,600-11,700 was breached but held. A close above the latter would indicate additional upside towards 11,800-11,900.
The S&P 500 settled at 3,443 (2.2%) following the midday push to 3,486. Prior and lower resistance at 3,475-3,500 was cleared but held. A move above the latter would suggest a retest towards 3,525-3,550.
The Dow tested an afternoon peak of 28,301 while closing at 27,847 (+1.3%). Fresh and lower resistance at 28,250-28,500 was breached but held. A pop above the latter would indicate additional strength towards 28,750-29,000.
The Russell 2000 finished at 1,615 (0.1%) with the session high tagging 1,631. New and lower resistance at 1,620-1,635 was tripped but held. A close above the latter would be an ongoing bullish signal for momentum towards 1,640-1,655.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) fell for the third-straight session after plunging to an intraday low of 28.03. Prior and upper support at 28.50-28 and the 50-day moving average were breached but held. A close below the latter would be an ongoing bullish signal for the stock market with additional backtest potential towards 26.50-26.
Lowered resistance is at 30-30.50 followed by 31.50-32 and the 200-day moving average.
The Wilshire 5000 Composite Index (NYSE: WLSH) extended its winning streak to three-straight session with the midday high tapping 35,957. Prior and lower resistance from early October at 35,750-36,000 was breached but held. A close above the latter would indicate additional strength towards 36,250-36,500.
Rising support is at 35,250-35,000 and the 50-day moving average.
RSI is in an uptrend after clearing and holding lower resistance at 55-60. A close above the latter would indicate additional momentum towards 65-70 and levels from mid-October.
The SPDR S&P Homebuilders ETF (NYSEArca: XHB) showed strength for the third-straight session following the intraday push to $56.82. Prior and lower resistance at $56.50-$57 was cleared but held. A close above the latter would be an ongoing bullish signal for upside towards $58-$58.50 with the all-time October peak at $58.34.
Rising support is at $55.50-$55 with backup help at $54-$53.50.
RSI remains in an uptrend with key resistance at 60 holding. A close above this level would signal additional upside towards 65-70 with the latter representing the October top. Support is at 55-50.
I’m still looking to add new trades this week but the upside gaps have been hard to trade. Hopefully, when a Presidential winner is decided, volatility will continue to lessen.
Momentum Options Play List
Closed Momentum Options Trades for 2020: 38-11 (78%). 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 and Text Alerts.
AT&T (T, $27.04, down $0.42)
T December 28 calls (T201218C00028000, $0.45, down $0.25)
Entry Price: $0.55 (10/29/2020)
Exit Target: $1.10
Stop Target: None
Action: New and upper support at $27-$26.75 was breached but held on the pullback to $26.86 yesterday. Lowered resistance at $27.25-$27.50.