MomentumOptions.com Pre-Market Update for 1/6/2023
Employment Data Stays Strong
8:00am (EST)
The stock market pulled back on Thursday following another round of jobs data that showed tightness in the labor market. Private payrolls rose to 235,000 versus forecasts for a print of 150,000 while weekly jobless claims fell to a three-month low of 204,000.
The Nasdaq tested a low of 10,295 before settling at 10,305 (-1.5%). Current and upper support at 10,400-10,250 failed to hold. A fade below the latter and the December 28th low at 10,207 would indicate a retest towards 10,150-10,000 with the October 13th 52-week low at 10,088.
The S&P 500 closed at 3,808 (-1.2%) after stumbling to a low of 3,802. Upper support at 3,800-3,750 was challenged but held. A drop below the latter would suggest additional weakness to 3,700-3,650 with the November 3rd low at 3,698.
The Russell 2000 bottomed at 1,745 before finishing at 1,753 (-1.1%). Near-term and upper support at 1,750-1,725 was breached but held. A close below the latter would imply a further slide towards 1,700-1,675 with the mid-October one-year low at 1,641. Below is a chart of the IWM.
The Dow ended at 32,930 (-1%) with the low touching 32,812. Upper support at 33,000-32,750 was busted and failed to hold. A close below the latter would signal downside risk to 32,500-32,250 and the 200-day moving average.
Volatility Index
The Volatility Index (VIX) was up for the third time in four sessions after bouncing to a high of 22.92. Lower resistance 22.50-23 was cleared and held. A pop above the latter and the 50-day moving average would indicate upside action towards 24-24.50.
Support is at 22-21.50.
Market Analysis
The iShares Russell Growth 1000 ETF (IWF) fell for the third time in four sessions with the low tapping $209.66. Early November and upper support at $210-$209.50 failed to hold. A close below the latter would signal downside action to $208-$207.50.
Resistance is at $212-$212.50.
RSI (relative strength index) is back in a downtrend with key support at 40 failing to hold. Continued closes below this level would suggest weakness towards 35-30 and levels from the first half of October. Resistance is at 45-50.
Sector
The MSCI Emerging Markets iShares (EEM) had its two-day winning streak snapped following the intraday pullback to $38.98. Upper support at $39-$38.50 was breached but held. A close below the latter and the 200-day moving average would imply a further slide towards $38.25-$37.75 and the 20-day moving average.
Resistance is at $39.50-$40.
RSI has rolled over with key support at 60 holding. A drop below this level would imply weakness towards 55-50 and levels from early this week. Resistance is at 65-70.
Market Outlook
The major indexes remain in 13-session trading ranges, excluding the Nasdaq, which is in a 9-session trading range. This morning’s jobs report will likely cause some volatility on the open but I expect these trading ranges to be in play thru at least next week.
I could have a New Trade this morning so stay locked-and-loaded in case I take action.
Momentum Options Play List
Closed Momentum Options Trades for 2023: 3-0 (100%). 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.
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