MomentumOptions.com Pre-Market Update for 7/14/2021

Inflation Comes in Hotter-than-Expected

8:00am (EST)

The stock market fell on Tuesday as a hot inflation report overshadowed the start of the second-quarter earnings season. Specifically, the June consumer price index was up 5.4% versus forecasts for a rise of 5%. This represented the highest 12-month rate since August 2008.

Earnings beats by JPMorgan Chase (JPM) and Goldman Sachs (GS) offset some of the inflation concerns though, with the broader market and Tech setting another round of fresh all-time highs. The blue-chips and small-caps lagged throughout the session but expectations for a strong earnings quarter should continue to support the market over the near-term.

The Nasdaq ended in the red at 14,677 (-0.4) despite tapping an intraday record high of 14,803. Key resistance at 14,750 was cleared but held for the second-straight session. Continued closes above this level keeps upside towards 14,850-15,000 in play.

The S&P 500 went out at 4,369 (0.4%) with the new all-time high hitting 4,392. Unchartered territory and key resistance at 4,400 was challenged but held before the lower close. A move above this level would suggest additional momentum towards 4,425-4,450.

The Dow tested an intraday low of 34,876 before finishing at 34,888 (-0.3%). Fresh and upper support at 34,750-34,500 was challenged but easily held. A drop below the latter would indicate a retest towards 34,250-34,000 and the 50-day moving average.

The Russell 2000 finished at 2,238 (-1.9%) and the session low. Key support at 2,250 and the 50-day moving average were breached and failed to hold. Continued closes below these levels keeps additional weakness towards 2,225-2,200 in the mix. Below is a chart of the IWM.

Market Movers

Shares of Corvus Gold (KOR) surged 22% after announcing it has received a proposal from AngloGold Ashanti Limited (AU) to acquire the company at $4 a share.

Volatility Index

The Volatility Index (VIX) snapped a two-session slide after tapping an afternoon high of 17.23. Current and lower resistance at 17-17.50 was tripped and failed to hold. A move above the latter would suggest a retest towards 18-18.50 and the 50-day moving average.

Support is at 16.50-16 followed by 15.50-15.

Market Analysis

The Invesco QQQ Trust (Nasdaq: QQQ) was unchanged after testing a fresh all-time high of $365.46. Unchartered territory and lower resistance at $365-$365.50 was breached but held. A close above the latter would indicate ongoing strength towards $367-$367.50.

Near-term support is at $361.50-$361.

RSI (relative strength indicator) has flatlined with key support at 75 holding. A close below this level would suggest additional weakness towards 70-65. Overbought resistance is at 80 and near the high from earlier this month.

Sector

The iShares PHLX Semiconductor ETF (Nasdaq: SOXX) had its two-session winning streak snapped following the intraday pullback to $445.82. Current and upper support at $446-$445.50 was breached but held. A close below the latter would signal a further fade towards $443-$442.50.

Resistance is at $449.50-$450 followed by $452-$452.50.

RSI is showing signs of rolling over with upper support at 55-50 holding. A close below the latter would suggest additional weakness towards 45-40 and levels from mid-May. Resistance is at 60-65.

Momentum Options Play List

Closed Momentum Options Trades for 2021: 18-11 (62%). 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.

GoDaddy (GDDY, $86.01, down $0.12)

GDDY August 97.50 calls (GDDY210820C00097500, $0.50, unchanged)

Entry Price: $1.20 (7/7/2021)
Exit Target: $2.40
Return: -57%
Stop Target: None

Action: Shares touched a low of $85.18 with new and upper support at $85.50-$85 getting breached but holding. Resistance remains at $86.50-$87 followed by $88-$88.50.

Juniper Networks (JNPR, $27.45, up $0.13)

JNPR August 28 calls (JNPR210820C00028000, $0.85, up $0.05)

Entry Price: $0.70 (7/7/2021)
Exit Target: $1.40
Return: 21%
Stop Target: None

Action: Tuesday’s peak hit $27.95 with the options trading up to $1.10. Fresh and lower resistance at $27.75-$28 was cleared but held. Support remains at $27.25-$27.

The regular JNPR 27.50 calls were heavily traded with volume of nearly 25,000 contracts. This is typically a bullish signal for higher highs but I’d like to see a close above $28 today to confirm the action.

Himax Technologies (HIMX, $14.95, down $0.44)

HIMX August 20 calls (HIMX210820C00020000, $0.30, down $0.10)

Entry Price: $1.00 (6/30/2021)
Exit Target: $2.00
Return: -70%
Stop Target: None

Action: Yesterday’s low kissed $14.91 with upper support at $15-$14.75 failing to hold. Resistance is at $15.25-$15.50.

Canoo (GOEV, $8.97, down $0.14)

GOEV August 10 calls (GOEV210820C00010000, $0.55, down $0.05)

Entry Price: $1.10 (6/30/2021)
Exit Target: $2.20
Return: -50%
Stop Target: None

Action: Shares tested a low of $8.79 with upper support at $9-$8.75 failing to hold. Resistance remains at $9.25-$9.50.

Marathon Oil (MRO, $13.12, down $0.21)

MRO August 15 calls (MRO210820C00015000, $0.35, down $0.05)

Entry Price: $0.70 (6/25/2021)
Exit Target: $1.40
Return: -50%
Stop Target: None

Action: Upper support at $13.25-$13 failed to hold on the backtest to $13.02. Resistance is at $13.25-$13.50.

Ford Motor (F, $14.61, up $0.

F August 18 calls (F210820C00018000, $0.10, down $0.03)

Entry Price: $0.55 (6/9/2021)
Exit Target: $1.10
Return: -82%
Stop Target: None

Action: Tuesday’s low tagged $14.30 with upper support at $14.25-$14 getting challenged but holding. Resistance is at $14.50-$14.75.