MomentumOptions.com Pre-Market Update for 3/25/2021
Market Stumbles for Second-Straight Session
The stock market showed strength throughout Wednesday’s session but suffered another round of late day selling pressure as Wall Street digested ongoing comments from Federal Reserve speakers Powell and Yellen. Much of the commentary reiterated the central bank’s stance that any inflation appearing this year will be transitory, and not significant enough to warrant a shift in their monetary policy positioning.
The Dow showed the most strength before slipping three points after testing an intraday high of 32,787 while closing at 32,420 (-0.01%). Current and lower resistance at 32,750-33,000 was cleared but held. A close above the latter would suggest additional upside towards 33,250-33,500 with this month’s all-time peak at 33,227.
The S&P 500 settled at 3,889 (-0.5%) despite trading to a first half high of 3,942. Near-term and lower resistance at 3,925-3,950 was breached but held. A move above the latter and the recent record high of 3,960 would indicate a breakout towards 3,975-4,000.
The Nasdaq ended on its session low of 12,961 (-2%). Prior and upper support at 13,000-12,850 failed to hold. A fade below the latter would signal ongoing weakness towards 12,750-12,600.
The Russell 2000 also finished on its session low of 2,134 (-2.4%). Prior and upper support at 2,150-2,125 was tripped and failed to hold. A close below the latter would signal further downside risk towards 2,100-2,075 with the early March low at 2,085. Below is a chart of the IWM.
Shares of Hall of Fame Resort & Entertainment (HOFV) jumped 39% after announcing a partnership with Dolphin Entertainment (DLPN) to offer non-fungible tokens (NFGs) that will allow fans of professional football and sports entertainment to buy and sell exclusive content developed by Hall of Fame Resort & Entertainment and its partners. DLPN was up another 4% but zoomed to an intraday high of $32.50 following Tuesday’s gain of 236% to $18.33.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) was up for the second-straight session after tagging a second high of 21.49. Current and lower resistance at 21-21.50 was cleared and held. A close above the latter would signal another run towards 23-23.50 and the 50-day moving average.
Rising support is at 20.50-20.
The Spider Small-Cap 600 ETF (NYSE: SLY) extended its losing streak to three-straight sessions following the late day fade to $90.04. Fresh and upper support at $90.50-$90 failed to hold. A close below the latter would suggest additional downside risk towards $88-$87.50.
Lowered resistance is at $91-$91.50 and the 50-day moving average.
RSI (relative strength indicator) remains in a downtrend with key support at 40 holding. A move below the latter would suggest additional weakness towards 35-30 and levels from last September. Resistance is at 45-50.
The Industrials Select Sector SPDR Fund (NYSE: XLI) snapped a four-session losing streak after testing an intraday high of $96.62. Prior and lower resistance at $96.50-$97 was breached but held. A close above the latter would indicate a retest towards $98-$98.50 with this month’s all-time peak at $98.52.
Shaky support is at $95-$94.50 followed by $93.50-$93.
RSI rebounded with key resistance at 60 holding. A close 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: 14-2 (88%). 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.
International Game Tech (IGT, $16.35, down $0.77)
IGT April 20 calls (IGT210416C00020000, $0.20, down $0.10)
Entry Price: $0.95 (3/17/2021)
Exit Target: $1.90
Stop Target: None
Action: Shares tapped a low of $16.34 ahead of the closing bell with prior and upper support at $16.50-$16.25 failing to hold. Lowered resistance is at $16.75-$17.
Altria Group (MO, $49.51, down $0.14)
MO April 47.50 puts (MO210416P00047500, $0.40, unchanged)
Entry Price: $0.75 (3/16/2021)
Exit Target: $1.50
Stop Target: 15 cents (Stop Limit)
Action: Wednesday’s low kissed $49.14 with upper support at $49.50-$49 getting breached but holding. Resistance is at $50-$50.50.
Ford Motor Company (F, $12.14, down $0.07)
F April 14 calls (F210416C00014000, $0.10, down $0.05)
Entry Price: $0.45 (3/8/2021)
Exit Target: $0.90
Stop Target: None
Action: Shares traded to a low of $12.12 with upper support at $12.20-$12.10 failing to hold. Resistance is at $12.20-$12.30.