Pre-Market Update for 12/3/2020

Bulls Keep Momentum, Tech Lags

8:00am (EST)

The stock market traded on both sides of the ledger on Wednesday before closing mostly higher with Tech lagging. A weaker-than-expected jobs number caused opening weakness before strength returned House Speaker Nancy Pelosi and Senate Democratic Leader Chuck Schumer indicated progress on the bipartisan coronavirus relief negotiations.

The Dow traded to a late day high of 29,902 shortly after the opening bell before ending at 29,883 (+0.2%). Near-term and lower resistance 30,000-30,250 was challenged but held. A move above the latter and the all-time high at 30,116 would suggest momentum towards 30,500-30,750.

The S&P 500 closed at 3,669 (+0.2%) after topping out at 3,670. Current and lower resistance at 3,675-3,700 was challenged but held. A close above the latter and the record peak at 3,678 would suggest additional upside towards 3,725-3,750.

The Russell 2000 tapped an intraday high of 1,842 before settling at 1,838 (+0.1%). Lower resistance at 1,850-1,870 was challenged but held. A close above the latter and the recent lifetime high at 1,862 would indicate continued strength towards 1,880-1,900.

The Nasdaq tested an afternoon high of 12,360 while finishing lower at 12,349 (-0.1%). Near-term and lower resistance at 12,400-12,500 was challenged but held. A move above the latter would signal continued fresh record peaks towards 12,600-12,700.

The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) was higher for the second-straight session despite tapping an intraday low of 20.04. Near-term and upper support at 20-19.50 was challenged but held. A close below the latter would indicate a further pullback towards 18.50-18.

Resistance remains at 21-21.50 followed by 22.50-23 with Wednesday’s peak reaching 21.25.

The SPDR S&P 500 ETF (NYSE: SPY) was up for the 2nd-straight session with the second half peak reaching $366.96. Resistance at $366.50-$367 was cleared and held. A close above the latter and Tuesday’s all-time peak at $367.68 would suggest continued upside towards $368.50-$369.

Current support is at $364.50-$364 followed by $363-$362.50.

RSI is back in an uptrend after clearing and holding lower resistance at 65-70 holding. A move above the latter would signal a retest towards 75-80 and levels from late August/ early September. Key support is at 60.

The Spider S&P Retail ETF (NYSE: XRT) was up for the second-straight session despite tagging an intraday low of $59.79. Current and upper support at $60-$59.50 was breached but held. A close below the latter would signal additional weakness towards $58.50-$58.

Lower resistance at $61-$61.50 with the recent all-time peak at $61.40.

RSI is in a slight uptrend with resistance at 75-80 holding and the latter representing the monthly top and overbought levels. Support is at 70-65.

I could have a new trade today so stay locked-and-loaded.

Momentum Options Play List

Closed Momentum Options Trades for 2020: 43-11 (80%). 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.

Grocery Outlet Holding (GO, $37.62, down $0.18)

GO January 40 calls (GO210115C00040000, $1.00, down $0.10)

Entry Price: $1.00 (11/30/2020)
Exit Target: $2.00
Return: 0%
Stop Target: None

Action: Upper support at $37.50-$37.25 was breached but held with Wednesday’s low kissing $37.32. Resistance is at $38-$38.25 and the 200-day moving average.