MomentumOptions.com Pre-Market Update for 7/2/2021

S&P 500 Up Six-Straight Sessions

8:00am (EST)

The stock market showed continued strength on Thursday and the start of the third-quarter with the broader market hitting a fresh record high. Better-than-expected economic news and the approval of a $715 billion transportation package fueled sentiment.

Initial jobless claims posted another post-pandemic low after falling 51,000 to 364,000 versus forecasts for a print of 395,000. Meanwhile, volatility fell for the second-straight session and for the seventh time in nine after closing below key support levels.

The Russell 2000 ended at 2,329 (+0.8%) with the afternoon high reaching 2,332. Current and lower resistance at 2,325-2,350 was cleared and held. A move above the latter and the lifetime high of 2,360 would indicate a breakout towards 2,375-2,400. Below is a chart of the IWM.

The S&P 500 closed at 4,319 (+0.5%) after testing an all-time peak of 4,320. Unchartered territory and key resistance at 4,325 was challenged but held. A close above this level would suggest ongoing momentum towards 4,350-4,375.

The Dow made a push to 34,640 before finishing at 34,633 (+0.4%). Key resistance at 34,750 easily held. A pop above this level would signal additional upside towards 35,000 with the record high from early May at 35,091.

The Nasdaq came within 2 points of a new all-time top after tapping 14,533 while settling at 14,522 (+0.1% ). Key resistance at 14,550 was challenged but held. A close above this level would be a bullish development for a trip towards 14,600-14,750.

Market Movers

Shares of Spero Therapeutics (SPRO) rallied 17% after announcing that Pfizer (PFE) invested $40 million in the company as part of the Pfizer Breakthrough Growth Initiative.

Volatility Index

The Volatility Index (VIX) tested an intraday low of 15.31. Near-term and upper support at 15.50-15 was recovered. A close below the latter would signal a retest towards 14.50-14 with Tuesday’s 52-week low at 14.10.

Resistance is at 16-16.50.

Market Analysis

The Invesco QQQ Trust (Nasdaq: QQQ) rebounded with the high reaching $355.09. Near-term and lower resistance at $355-$355.50 was breached but held. A close above the latter and Wednesday’s record peak at $355.23 would indicate ongoing strength towards $357-$357.50.

Support is at $353-$352.50 followed by $350.50-$350.

RSI (relative strength indicator) has flatlined with upper support at 70 holding. A close below this level would suggest additional weakness towards 65-60. Overbought resistance is at 75 and the September 2020 high.

Sector

The Technology Select Sector Spider Fund (NYSE: XLK) was up for the third time in four sessions after topping out at $147.91. Key resistance at $148 was challenged but held. A close above this level and Wednesday’s all-time peak at $148.02 would suggest strength towards $149.50-$150.

Support is at $147-$146.50 followed by $145-$144.50.

RSI is showing signs of rolling over with key support at 70 holding. A close below this level would signal weakness towards 65-60. Resistance is at 75-80 and levels from August 2020.

Momentum Options Play List

Closed Momentum Options Trades for 2021: 18-9 (67%). 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.

Himax Technologies (HIMX, $15.91, down $0.75)

HIMX August 20 calls (HIMX210820C00020000, $0.70, down $0.30)

Entry Price: $1.00 (6/30/2021)
Exit Target: $2.00
Return: -30%
Stop Target: None

Action: Thursday’s backtest reached $15.65 with upper support is at $15.75-$15.50 getting tripped but holding. Resistance is at $16.25-$16.50.

Canoo (GOEV, $9.47, down $0.47)

GOEV August 10 calls (GOEV210820C00010000, $1.00, down $0.20)

Entry Price: $1.10 (6/30/2021)
Exit Target: $2.20
Return: -9%
Stop Target: None

Action: Shares traded down to $9.45 with upper support at $9.50-$9.25 failing to hold. Resistance at $9.75-$10.

Marathon Oil (MRO, $14.17, up $0.55)

MRO August 15 calls (MRO210820C00015000, $0.75, up $0.15)

Entry Price: $0.70 (6/25/2021)
Exit Target: $1.40
Return: 7%
Stop Target: None

Action: Shares tested a 52-week peak of $14.33 with fresh and lower resistance at $14.25-$14.50 getting cleared but holding. New support is at $14-$13.25.

AT&T (T, $29.11, up $0.33)

T July 28 puts (T210716P00028000, $0.15, down $0.10)

Entry Price: $0.55 (6/18/2021)
Exit Target: $1.10
Return: -73%
Stop Target: None

Action: Thursday’s high hit $29.22 with lower resistance at $29-$29.25 getting recovered. Support remains at $28.75-$28.50 and the 200-day moving average.

Ford Motor (F, $14.91, up $0.05)

F August 18 calls (F210820C00018000, $0.20, down $0.03)

Entry Price: $0.55 (6/9/2021)
Exit Target: $1.10
Return: -64%
Stop Target: None

Action: Key resistance at $15 was challenged but held with yesterday’s peak reaching $14.97. Support remains at $14.75-$14.50.

Tencent Music Entertainment Group (TME, $15.47, down $0.01)

TME July 17 calls (TME210716C00017000, $0.15, down $0.02)

Entry Price: $0.60 (6/9/2021)
Exit Target: $1.20
Return: -75%
Stop Target: None

Action: Upper support at $15.25-$15 was breached but held with the low tapping $15.23. Resistance remains at $15.75-$16 and the 50-day moving average.