Pre-Market Update for 2/10/2021

Nasdaq Clears 14,000/ Profit Alert (BAC)

8:00am (EST)

The stock market started Tuesday’s session in the red before showing strength latter in the session while settling mixed. All of the major indexes set fresh records high with Tech and the small-caps showing continued momentum while the broader market lagged.

The Russell 2000 tested an intraday record high of 2,309 before closing at 2,299 (+0.4%). Unchartered territory and lower resistance at 2,300-2,320 was cleared but held. A move above the latter would indicate additional upside towards 2,330-2,350.

The Nasdaq traded to an all-time morning peak of 14,044 while finishing at 14,007 (+0.1%). Key resistance at 14,000 was breached and held. Continued closes above this level would suggest ongoing momentum towards 14,100-14,250.

The Dow settled slightly lower at 31,375 (-0.03%) after reaching a lifetime high of 31,439. Fresh and lower resistance at 31,500-31,750 was challenged but held. A close above the latter would signal upside towards the 32,000 area.

The S&P 500 tagged a record high of 3,918 before ending slightly in the red at 3,902 (-0.1%). Key resistance at 3,925 was challenged but held. A close above this level would indicate additional strength towards 3,950-3,975.

The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) was up for the second-straight session after tapping an intraday of 22.26. Near-term and lower resistance at 22-22.50 was breached but held for the second-straight session. A close above the latter would signal a retest towards 23-23.50 and the 50-day moving average.

Support remains at 21-20.50 with a more important hurdle at the 20 level.

The S&P 400 Mid Cap Index (NYSE: MID) extended its winning streak to seven-straight sessions after testing an all-time high of 2,531. Uncharted territory and lower resistance at 2,525-2,550 was cleared but held. A move above the latter would indicate further momentum towards 2,575-2,600.

Rising support is at 2,500-2,475 followed by 2,450-2,425.

RSI (relative strength index) remains in an uptrend with key resistance at 70 holding. A move above this level would signal additional strength towards 75 and the early January high. Support is at 65-60.

The Consumer Staples Select SPDR Fund (NYSE: XLP) was down for the first time in seven sessions despite trading to an intraday high of $66.18. Near-term and lower resistance at $66.25-$66.75 was challenged but held. A close above the latter and the 50-day moving average would indicate additional strength towards $67-$67.50.

Key support is at $65.50.

RSI is showing signs of fading after failing to clear and hold lower resistance at 55-60. A move above 60 and a level that has been holding since mid-November would suggest upside towards 65-70. Key support is at 50.

I have another Profit Alert for today as BAC showed some weakness while EEM gave us some nice pin action. I could also have a New Trade at some point so stay locked-and-loaded.

Momentum Options Play List

Closed Momentum Options Trades for 2021: 4-1 (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.

iShares MSCI Emerging Markets ETF (EEM, $56.94, up $0.60)

EEM March 58 calls (EEM210319C00058000, $0.95, up $0.20)

Entry Price: $0.65 (2/5/2021)
Exit Target: $1.30
Return: 46%
Stop Target: None

Action: Tuesday’s fresh 52-week high reached $56.99 with new and lower resistance at $56.75-$57 getting cleared and holding. Support is at $56.50-$56.25.

Bank of America (BAC, $32.95, down $0.14)

BAC March 32 calls (BAC210319C00032000, $1.80, down $0.10)

Entry Price: $0.65 (2/2/2021)
Exit Target: $2.50 (closed half at $1.95 on 2/8/2021)
Return: 181%
Stop Target: $1.70 (Stop Limit)

Action: The Stop Limit at $1.70 was tripped on the stock’s fade to $32.58 yesterday.

We could be back in BAC quickly if shares trade above $33.25 this week, or next.

AT&T (T, $28.62, down $0.15)

T February 31 calls (T210219C00031000, $0.10, unchanged)

Entry Price: $0.40 (1/6/2021)
Exit Target: $0.80
Return: -75%
Stop Target: None

Action: Close the trade at current levels to save the remaining premium.

We have done well trading options in AT&T over the past couple of years but this time we are simply running out of time. If shares can get back above $29.25-$29.50 we will likely get back in AT&T with March or April calls.