MomentumOptions.com Pre-Market Update for 1/8/2021
Bulls Keep Ongoing Momentum
The stock market showed momentum for the third-straight session as Congress certified President-elect Joe Biden’s victory in the Electoral College early Thursday morning. The recognition by Congress, along with the Democratic capture of the two Georgia senate seats, fueled optimism with President Trump also promising an orderly transition on January 20th.
The Nasdaq tested a late day record peak of 13,090 while finishing at 13,067 (+2.6%). Unchartered territory and lower resistance at 13,100-13,225 was breached and held. A move above the latter would suggest additional strength towards 13,250-13,375.
The Russell 2000 tapped an afternoon all-time high of 2,099 before closing at 2,096 (+1.9%). Fresh and lower resistance at 2,080-2,100 was cleared and held. A close above the latter would indicate additional upside towards 2,120-2,140.
The S&P 500 traded to an intraday lifetime peak of 3,811 before ending at 3,803 (+1.5%). New and lower resistance at 3,800-3,850 was breached and held. A close above the latter would signal additional momentum towards 3,875-3,925.
The Dow settled at 31,041 (+0.7%) while trading to a record high of 31,193. Unchartered territory and lower resistance at 31,000-31,250 was cleared and held. A close above the latter would suggest further upside towards 31,500-31,750.
In economic news, Initial Jobless Claims claims declined -3,000 to 787,000, below forecasts for print of 815,000, and follows the -16,000 dip to 790,000 previously. This left the four-week moving average at 818,800 versus 837,5000. Initial claims not seasonally adjusted rose 77,400 to 922,100 versus the -28,200 slide to 844,700 previously. Continuing claims declined -126,000 to 5,072,000 while the insured unemployment rate was unchanged at 3.5%.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) extended its losing streak to three-straight sessions after testing an intraday low of 22.25. Current and upper support at 22.50-22 was recovered. A close below the latter would suggest a further slide towards 21-20.50.
Lowered resistance is at 24.50-25 and the 50-day moving.
The Invesco QQQ Trust (Nasdaq: QQQ) was up for the second time in three sessions with the second half and new all-time peak hitting $315.84. Fresh and lower resistance at $315.50-$316 was cleared but held. A close above the latter would indicate momentum towards the $317-$317.50 area.
New support is at $313-$312.50 followed by $310.50-$310.
RSI (relative strength indicator) is back in an uptrend with key resistance at 60 getting cleared and holding. Continued closes above this level would signal additional strength towards 65-70 with the latter holding since early December. Support is at 55-50.
The Industrials Select Sector SPDR Fund (NYSE: XLI) extended its winning streak to three-straight sessions following the opening push to $90.18 and new all-time peak. Unchartered territory and lower resistance at $90-$90.50 was cleared but held. A close above the latter would signal additional strength towards $91.50-$92.
Rising support is at $89-$88.50 followed by $87.50-$87.
RSI is in an uptrend after clearing and holding key resistance at 60. Continued closes above this level keeps upside towards 65-70 in play. Support is at 55-50.
I have updated our current trades so let’s go check the tape.
Momentum Options Play List
Closed Momentum Options Trades for 2021: 1-0 (100%). 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, $29.91, up $0.08)
T February 31 calls (T210219C00031000, $0.44, unchanged)
Entry Price: $0.40 (1/6/2021)
Exit Target: $0.80
Stop Target: None
Action: Thursday’s peak reached $30.09 with prior and lower resistance from early December at $30-$30.25 getting cleared but holding. Support is at $29.75-$29.50.
Cisco Systems (CSCO, $44.96, up $0.56)
CSCO February 48 calls (CSCO210219C00048000, $0.60, up $0.05)
Entry Price: $0.60 (12/28/2020)
Exit Target: $1.20
Stop Target: None
Action: Shares tested a high of $45.10 with prior and lower resistance at $45-$45.25 getting breached but holding. Slightly rising support is at $44.50-$44.25.
Boston Scientific (BSX, $36.56, down $0.20)
BSX February 31 puts (BSX210219P00031000, $0.20, unchanged)
Entry Price: $0.85 (12/14/2020)
Exit Target: $1.70
Stop Target: None
Action: Upper support at $36.50-$36.25 was breached but held. Resistance remains at $36.75-$37.