MomentumOptions.com Pre-Market Update for 12/7/2020
Market Closes on Another Round of Fresh Record Peaks
The stock market closed higher on Friday despite a disappointing jobs report as Wall Street remained focused on positive vaccine developments and growing hopes for more fiscal stimulus before yearend. The gains lifted all four of the major indexes to fresh all-time highs, along with the Transports, with volatility continuing to hold a key level of support.
The Russell 2000 finished on its session high of 1,892 (+2.4%). Fresh and lower resistance at 1,880-1,900 was cleared and held. A move above the latter would indicate continued upside towards 1,920-1,940.
The S&P 500 ended at 3,699 (+0.9%) and new record close. New and lower resistance at 3,675-3,700 was topped and held. A close above the latter would suggest additional strength towards 3,725-3,750.
The Dow settled on it peak of 30,218 (+0.8%). Near-term and lower resistance 30,000-30,250 was cleared and held. A pop above the latter would suggest momentum towards 30,500-30,750.
The Nasdaq closed at 12,464 (+0.7%) and the session top. Near-term and lower resistance at 12,400-12,500 was breached and held. A move above the latter would signal continued record highs towards 12,600-12,700.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) had its three session winning streak snapped following the morning tumble to 19.97. Current and upper support at 20-19.50 was breached but held. A close below the latter would indicate a further pullback towards 18.50-18.
Resistance is at 21-21.50 followed by 22.50-23.
The Wilshire 5000 Composite Index (NYSE: WLSH) extended its winning streak to four-straight sessions with the new record high and close at 38,703. Unchartered territory and lower resistance at 38,500-38,750 was cleared and held. A move above the latter would indicate momentum towards 39,000-39,250.
New support is at 38,250-38,000 with a close below the latter signaling a possible near-term top.
RSI (relative strength index) remains in a slight uptrend after clearing and holding key resistance at 70. Continued closes above this level would indicate additional momentum towards 75-80 and levels from late August/ early September. Support is at 65-60.
The Communication Services Select Sector SPDR (NYSE: XLC) was up for the third time in four sessions after tagging an intraday high of $67.12. Current and lower resistance is at $67-$67.50 was cleared but held. A close above the latter and Thursday’s all-time peak at $67.46 would suggest further strength towards $68.50-$69.
Support is at $66.50-$66 followed by $65.50-$65.
RSI has leveled out with key resistance at 70 holding. A close above this level would signal strength towards 75-80 and prior levels from August. Support is at 65-60.
I have updated our current positions so let’s go check the tape.
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.
AT&T (T, $29.54, up $0.31)
T January 30 calls (T210115C00030000, $0.55, up $0.10)
Entry Price: $0.40 (12/3/2020)
Exit Target: $0.80
Stop Target: None
Action: Friday’s peak reached $29.76 with fresh and lower resistance at $29.75-$30 getting breached but holding. Support is at $29.25-$29 and the 200-day moving average.
Grocery Outlet Holding (GO, $37.50, up $0.23)
GO January 40 calls (GO210115C00040000, $0.90, flat)
Entry Price: $1.00 (11/30/2020)
Exit Target: $2.00
Stop Target: None
Action: Lower resistance at $37.50-$38 and the 200-day moving average was reclaimed with Friday’s high tapping $37.75. Support at $37-$36.75.