Pre-Market Update for 1/11/2021

Market Stays Strong on Continued Stimulus Hope

8:00am (EST)

The stock market tapped another round of record highs on Friday, excluding the blue-chips, as hopes of more stimulus were confirmed after President-elect Biden said his economic package will be in the trillions of dollars. This offset a disappointing jobs report that showed the economy lost jobs for the first time in eight months in December as the lockdowns from the coronavirus pandemic continued.

The Nasdaq tested an intraday peak of 13,208 while finishing at 13,201 (+1%). Unchartered territory and lower resistance at 13,200-13,325 was cleared and held. A move above the latter would suggest additional strength towards 13,375-13,500.

The S&P 500 traded to an afternoon high of 3,826 before ending at 3,824 (+0.6%). New and lower resistance at 3,825-3,850 was breached but held. A close above the latter would indicate additional momentum towards 3,875-3,900.

The Dow closed at 31,097 (+0.2%) while trading to a high of 31,140. Near-term and lower resistance at 31,150-31,400 was challenged but held. A close above the latter and Thursday’s all-time peak at 31,193 would signal further upside towards 31,500-31,750.

The Russell 2000 tagged an opening high of 2,113 before closing lower at 2,091 (-0.3%). Fresh and lower resistance at 2,100-2,120 was cleared but held. A close above the latter would indicate additional upside towards 2,130-2,150. Below is a chart of the IWM.

For the week, the Russell 2000 zoomed 5.9% and the Nasdaq jumped 2.4%. The S&P 500 rallied 1.8% and the Dow was up 1.6%.

The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) fell for the fourth-straight session with the intraday low tapping 21.42. Current and upper support at 21.50-21 was breached but held. A move below the latter would signal a possible retest towards 20.50-20 with the late November low at 19.51.

Lowered resistance is at 23-23.50 followed by 24.50-25 and the 50-day moving.

The S&P 400 Mid Cap Index (NYSE: MID) had its three-session winning streak snapped despite testing an all-time high of 2,434 shortly after the opening bell. Unchartered territory and lower resistance at 2,425-2,450 was breached but held. A close above the latter would indicate further momentum towards 2,475-2,500.

Support is at 2,400-2,375 followed by 2,325-2,300.

RSI (relative strength index) is showing signs of leveling out with key resistance from early June at 75 holding. A move above this level would signal a possible run towards 80 and the overbought peak from early October 2017. Support is at 70-65.

The iShares MSCI Emerging Markets ETF (NYSE: EEM) surged to late day and fresh multi-year high of $54.74. Longer term and lower resistance at $54.50-$55 was cleared and held. A move below the latter would be a bullish signal for additional strength towards $55.50-$56 and levels from October 2007.

Fresh support is at $54-$53.50 with a close below $53 suggesting a possible near-term top.

RSI is in an uptrend with key resistance at 75 getting cleared and holding. Continued closes above this level would indicate strength towards 80-85 and overbought levels from February 2018. Support is at 70.

Monday’s earnings announcements:

Before the open: AZZ Inc. (AZZ), Commercial Metals Company (CMC)

After the close: CNX Coal Resources (CNXC), Kura Sushi USA (KRUS), Limoneira (LMNR), Simulations Plus (SLP), SYNNEX (SNX), VOXX International (VOXX)

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, $29.02, down $0.37)

T February 31 calls (T210219C00031000, $0.32, down $0.12)

Entry Price: $0.40 (1/6/2021)
Exit Target: $0.80
Return: -20%
Stop Target: None

Action: Friday’s low tagged $28.75 with upper support at $28.75-$28.50 getting kissed but holding. Lowered resistance is at $29.25-$29.50.

Cisco Systems (CSCO, $45.06, up $0.10)

CSCO February 48 calls (CSCO210219C00048000, $0.65, up $0.05)

Entry Price: $0.60 (12/28/2020)
Exit Target: $1.20
Return: 8%
Stop Target: None

Action: Shares tested a high of $45.41 with prior and lower resistance at $45.25-$45.50 getting breached but holding. Rising support is at $44.75-$44.50.

Boston Scientific (BSX, $36.75, up $0.19)

BSX February 31 puts (BSX210219P00031000, $0.20, down $0.05)

Entry Price: $0.85 (12/14/2020)
Exit Target: $1.70
Return: -76%
Stop Target: None

Action: Lower resistance at $37-$37.25 was cleared but held following the close on the 200-day moving average. Support is at $36.50-$36.25.