MomentumOptions.com Pre-Market Update for 1/13/2023
Round Numbers in Focus
8:00am (EST)
The stock market showed continued strength on Thursday as Wall Street cheered fresh inflation data that showed prices increased at a slower annual rate in December. The Consumer Price Index decreased 0.1% over the prior month but increased 6.5% over the prior year, matching expectations.
The Russell 2000 settled on the session high at 1,876 (+0.x%). Mid-December and lower resistance at 1,875-1,900 was cleared and held. A close above the latter and the December peaks just north of 1,898 would imply upside towards 1,925-1,950. Below is a chart of the IWM.
The Dow went out at 34,189 (+0.6%) with the high at 34,292. Lower resistance at 34,250-34,500 was topped but held. A close above the latter would signal momentum towards 34,750-35,000 with the December 13th peak at 34,712.
The Nasdaq surged to an intraday peak of 11,027 before closing at 11,001 (+0.6%). Key resistance from early November at 11,000 was reclaimed. Continued closes above this level would suggest ongoing strength towards 11,100-11,250.
The S&P 500 ended at 3,983 (+0.3) after soaring to a second half high of 3,997. Key resistance at 4,000 was challenged but held. Continued closes above this level and the 200-day moving average would indicate a further run to 4,050-4,100.
Volatility Index
The Volatility Index (VIX) zigzagged for the seventh-straight session after closing on the session low of 18.83. Key support at 19 was breached and held. Continued closes below this level would be a bullish development for the market with additional weakness towards 18-17.50.
New resistance is at 20-20.50.
Market Analysis
The Spiders Dow Jones Industrial Average ETF (DIA) was up for the second-straight session after tagging a high of $343. Mid-December and lower resistance at $343-$343.50 was kissed but held. A pop above the latter would signal a further push towards $345-$345.50 with the December peak at $348.22.
Rising support is at $338-$337.50.
RSI is in an uptrend with key resistance at 60 getting cleared and holding. Continued closes above this level would indicate strength to 65-70 and levels from November. Support is at 55-50.
Sector
The Consumer Staples Select Spiders (XLP) was down for the third time in four sessions after testing an intraday low of $74.21. Upper support at $74.50-$74 and the 50-day moving average failed to hold. A close below the latter above the latter would signal downside action towards $73-$72.50 and the 200-day moving average.
Resistance is at $75-$75.50.
RSI is in a downtrend with key support at 50 failing to hold. Continued closes below this level would indicate further weakness to 45-40 and levels from October. Resistance is at 55-60.
Market Outlook
The close below 20 on the VIX was big-time for the bulls, as long as it holds today, and ahead of the three-day weekend. The market will be closed on Monday for a holiday and earnings this morning will likely dictate if traders want to stay long or short over the three-day weekend.
I could have a New Trade today, possibly on a recent favorite that just gave us a triple-digit return, but may hold off until Tuesday as I can spend the weekend looking at a lot more setups.
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.
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.
CSX (CSX, $32.49, up $0.04)
CSX February 33 calls (CSX230203C00033000, $0.75, unchanged)
Entry Price: $0.75 (1/9/2023)
Exit Target: $1.50
Return: 0%
Stop Target: None
Action: Shares hit a high of $32.70 with lower resistance at $32.50-$32.75 getting tripped but holding. Support is at $32-$31.75.
