Pre-Market Update for 11/6/2020

Bulls Show Continued Momentum/ New Trade (X)

8:00am (EST)

Wall Street showed continued momentum for the fourth-straight session on hopes the winner of the U.S. presidential and congressional elections would soon be completed. The morning gains held into the closing bell after the Fed reiterated its commitment to provide sustained stimulus amid the ongoing coronavirus pandemic.

The Russell 2000 tapped an intraday high of 1,664 while settling at 1,660 (+2.8%). Prior and lower resistance from early February at 1,650-1,665 was cleared and held. A closes above the latter would be a bullish signal for a additional momentum towards 1,675-1,690.

The Nasdaq traded to an intraday peak of 11,924 before closing at 11,890 (+2.6%). Mid-October and lower resistance at 11,900-12,000 was breached but held. A move above the latter and the all-time high of 12,074 would indicate further strength towards 12,100-12,200.

The Dow traded to a morning peak of 28,495 before settling at 28,390 (+2%). Lower resistance from early October at 28,250-28,500 was recovered. A close above the latter would indicate additional upside towards 28,750-29,000.

The S&P 500 ended at 3,510 (+2%) after topping out at 3,529. Fresh and lower resistance at 3,525-3,550 was cleared but held. A close above the latter would suggest additional strength towards 3,425-3,450.

The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) was down for the fourth-straight session following the intraday fade to 26.04. Prior and upper support from mid-October at 26.50-26 was breached but held. A close below the latter would indicate additional weakness towards 25-24.50.

Lowered resistance is at 28.50-29 and and the 50-day moving average followed by 30-30.50.

The Invesco QQQ Trust (Nasdaq: QQQ) extended its winning streak to four-straight sessions after trading to a high of $295.39. Prior and lower resistance from mid-October at $295-$295.50 was cleared but held. A close above the latter would indicate additional momentum towards $297-$297.50.

Fresh support is at $292-$291.50 followed by $290.50-$291.

RSI (relative strength indicator) remains in an uptrend after clearing and holding key resistance at 60. Continued closes above this level would signal additional strength towards 65-70. Support is at 55-50.

The iShares PHLX Semiconductor ETF (Nasdaq: SOXX) was up for the fourth-straight session after trading to a fresh all-time high of $338.63. Uncharted territory and lower resistance $338.50-$339 was cleared but held. A close above the latter would indicate an ongoing breakout with upside potential towards the $340 area.

Near-term and rising support at $335.50-$335 followed by $332.50-$332.

RSI is in a strong uptrend after clearing and holding resistance lower resistance at 65-70. A move above the latter and the October top would signal additional strength towards 75-80. Support is at the 60 level.

I have a New Trade I would like to try to get into on this morning’s open but I’m using a strict Limit Order. Please read the trade instructions carefully.

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.

New Trade!

United States Steel (X, $9.67, up $0.58)

Buy to Open X December 10 calls (X201218C00010000, $0.70, up $0.20)

Action: I like these call options at current levels and you can use a Limit Order up to 80 cents to get the best fills. If the calls open above 80 cents, VOID the trade. These are the regular X December 10 calls that expire on December 18th, 2020.

Current Trades

AT&T (T, $27.51, up $0.47)

T December 28 calls (T201218C00028000, $0.60, up $0.15)

Entry Price: $0.55 (10/29/2020)
Exit Target: $1.10
Return: -10%
Stop Target: None

Action: Lower resistance at $27.75-$28 was cleared bur held on yesterday’s trip to $27.85. Support at $27.25-$27.