Pre-Market Update for 2/18/2021

Blue-Chips Stay Strong

8:00am (EST)

The stock market was choppy on Tuesday while trading mostly in the red as investors awaited the latest update from The Fed. The major indexes rebounded off their lows while closing mostly lower after the January minutes revealed the Fed was more optimistic about the long-term health of the economy. Additionally, most Fed officials thought the stimulus passed in December, the chance of more stimulus this year and progress in vaccinations would lead to a sizable boost in economic activity.

The Dow bucked the trend after closing at a new all-time high of 31,613 (+0.3%) with the late day peak hitting 31,643. Current and lower resistance at 31,500-31,750 was cleared and held. A move above the latter would signal ongoing strength towards 32,000.

The S&P 500 closed at 3,731 (-0.03%) following the morning fade to 3,900. Near-term and upper support at 3,900-3,875 was tapped but held. A drop below the latter would suggest additional weakness towards 3,850-3,825.

The Nasdaq ended at 13,965 (-0.6%) following the intraday tumble to 13,804. Fresh and upper support at 13,800-13,700 was challenged but held. A close below the latter would indicate further weakness towards 13,600-13,500.

The Russell 2000 finished at 2,256 (-0.7%) after trading to a morning low of 2,226. New and upper support at 2,250-2,225 was tripped but held. A close below the latter would signal a continued backtest towards 2,175-2,150. Below is a chart of the IWM.

The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) was up for the second-straight session after testing a high of 23.44. Near-term and lower resistance at 23-23.50 was breached but held. A close above the latter and the 50-day moving average would suggest upside towards 24.50-25.

Rising support is at 21-20.50 followed by 20-19.50.

The Wilshire 5000 Composite Index (NYSE: WLSH) fell for the second-straight session following the intraday pullback to 41,579. Current and upper support at 41,750-41,500 was tripped but held. A move below the latter would indicate additional weakness towards 41,250-41,000.

Resistance is at 42,000-42,250 with Tuesday’s all-time peak at 42,290.

RSI (relative strength index) is in a slight downtrend with upper support at 65-60 holding. A move below the latter would signal weakness towards 55-50. Resistance is at 70-75.

The iShares PHLX Semiconductor ETF (Nasdaq: SOXX) had its four-session winning streak snapped following the intraday drop to $425.91. New and upper support at $426-$425.50 was breached but held. A close below the latter would suggest additional risk towards $423.50-$423.

Resistance $434.50-$435 followed by $437.50-$438 with Tuesday’s all-time record high at $443.97.

RSI has rolled over with key support at 60 holding. A close below this level would signal additional weakness towards 55-50. Resistance is at 65-70.

I have updated our current positions so let’s go check the tape.

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.

Fox Corporation (FOXA, $31.75, up $0.02)

FOXA March 34 calls (FOXA210319C00034000, $0.70, unchanged)

Entry Price: $1.05 (2/12/2021)
Exit Target: $2.10
Return: -33%
Stop Target: None

Action: Wednesday’s rebound reached $32.11 with lower resistance at $32-$32.25 getting cleared but holding. Support is at $31.50-$31.25.

Pfizer (PFE, $34.89, up $0.20)

PFE March 36 calls (PFE210319C00036000, $0.55, up $0.05)

Entry Price: $0.55 (2/10/2021)
Exit Target: $1.10
Return: 0%
Stop Target: None

Action: Yesterday’s high kissed $35 with lower resistance at $34.75-$35 and the 200-day moving average getting recovered. Support is at $34.50-$34.25.

iShares MSCI Emerging Markets ETF (EEM, $57.96, up $0.02)

EEM March 58 calls (EEM210319C00058000, $1.30, down $0.05)

Entry Price: $0.65 (2/5/2021)
Exit Target: $1.85 (closed half at $1.40 on 2/11/2021)
Return: 108%
Stop Target: $1.20 (Stop Limit)

Action: Shares were up for the 12th-straight session with Wednesday’s high reaching $58. Lower resistance at $58-$58.25 was breached but held. Support is at $57.75-$57.50.