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MomentumOptions.com Pre-Market Update for 9/13/2022

Dow Recovers 50-Day Moving Average

8:00am (EST)

The stock market stayed hot as the bulls recorded their fourth-straight win to start the week. With earnings season winding down, Wall Street will focus on this week’s economic news concerning inflation and how the Fed might possibly react.

All of the major sectors settled higher with Energy (+1.8%) and Technology (+1.6%) showing the most strength. One slight concern was the fact volatility was up on market strength and closed back above a key level of resistance.

The Nasdaq ended at 12,266 (+1.3%) with the intraday peak hitting 12,270. Late July and lower resistance at 12,250-12,400 was cleared and held. A move above the latter would suggest ongoing strength to 12,500-12,650.

The Russell 2000 went out on its session high of 1,906 (+1.2%). Key resistance at 1,900 was recovered. Continued closes above this level would indicate additional strength towards 1,925-1,950 and the 200-day moving average. Below is a chart of the IWM. 

The S&P 500 finished at 4,110 (+1.1%) after testing a high of 4,119. Prior and lower resistance at 4,100-4,125 was reclaimed. A close above the latter would be an ongoing bullish development for upside to 4,150-4,175.

The Dow traded up to 32,504 before closing at 32,381 (+0.7%) and back above its 50-day moving average. Late July and lower resistance at 32,500-32,750 was topped but held. A pop above the latter would signal additional strength towards 32,500-32,750.

Volatility Index

The Volatility Index (VIX) snapped a three-session slide after tapping a high of 24.23. New and lower resistance at 24-24.50 was cleared but held. A move above the latter would suggest a retest to 25-25.50 and the 200-day moving average.

Support is at 23.50-23 and the 50-day moving average.

Market Analysis

The Invesco QQQ Trust (QQQ) extended its winning streak to four-straight following the intraday trip to $311.08. Fresh and lower resistance at $311-$311.50 was cleared but held. A close above the latter would signal additional upside towards $313-$313.50.

Rising support is at $307.50-$307 and the 50-day moving average.

RSI (relative strength indicator) remains in an uptrend after clearing and holding key resistance at 50. Continued closes above this level would indicate strength towards 55-60 and levels from mid-August. Support is at 45-40.

Sector

The iShares PHLX Semiconductor ETF (SOXX) was also up for the fourth-straight session with the peak reaching $379.29. New and lower resistance at $379-$379.50 was tripped but held. A pop above the latter would indicate additional gains to $381.50-$382.

Support is at $373-$372.50.

RSI is showing signs of flatlining with key resistance at 50 holding. A close above this level would suggest upside action towards 55-60 and levels from late August. Support is at 45-40.

Market Outlook

This morning’s Consumer Price Index will likely set the tone for today’s action as it is due out before the open. Economists are expecting that CPI rose 8.1% over the prior year in August, down from an 8.5% increase in July. A deeper dive and the key takeaway will be the month-over-month number, as forecasts expect a dip of 0.1% from July to August.

The Fed will be watching the core CPI, which back out food and energy, with forecasts for a 6.1% rise over the same month last year, and up from the 5.9% print in July. The reading will likely have an impact whether the Fed hikes interest rates by 0.5% or 0.75% later this month.

There is a chance I add another new trade if there is continued market strength today so stay locked-and-loaded.

Momentum Options Play List

Closed Momentum Options Trades for 2022: 24-15 (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.

Intel (INTC, $31.56, up $0.10)

INTC (weekly) October 32 calls (INTC221007C00032000, $0.90, up $0.05)

Entry Price: $0.80 (9/9/2022)
Exit Target: $1.60
Return: 13% 
Stop Target: None

Action: Shares made a run to $31.86 with new and lower resistance at $31.75-$32 getting cleared but holding. Support remains at $31.25-$31.

Rocket Companies (RKT, $8.09, up $0.05)

RKT December 8 calls (RKT221216C00008000, $1.05, unchanged)

Entry Price: $0.95 (9/9/2022)
Exit Target: $1.90
Return: 11% 
Stop Target: None

Action: Monday’s high touched $8.15 with near-term and lower resistance at $8.25-$8.50 getting challenged but holding. Support is at $7.75-$7.50.

Diana Shipping (DSX, $4.97, up $0.06)

DSX December 6 calls (DSX221216C00006000, $0.20, unchanged)

Entry Price: $0.40 (8/18/2022)
Exit Target: $1.00
Return: -50% 
Stop Target: None

Action: Prior and lower resistance from late July at $5-$5.10 was topped but held with the high hitting $5.01. A move above the latter and the 50-day moving average would be a renewed bullish development. Support is at $4.90-$4.80.