MomentumOptions.com Pre-Market Update for 1/20/2023

Nasdaq/ S&P Close Below 50-Day MA’s

8:00am (EST)

The stock market extended its losing streak to three-straight sessions, overall, following Thursday’s dip to lower lows. The small-caps held its major moving averages but remains in a precarious position on continued weakness.

The Russell 2000 traded to a low of 1,825 before going out at 1,836 (-1%). New and upper support at 1,825-1,800 and the 200-day/ 50-day moving averages were challenged but held. A drop below these levels would indicate ongoing weakness towards 1,775-1,750. Below is a chart of the IWM.

The Nasdaq ended at 10,852 (-1%) and back below its 50-day moving average with the intraday low kissing 10,804. Upper support at 10,900-10,750 failed to hold. A move below the latter would imply a further slide to 10,650-10,500.

The S&P 500 settled at 3,898 (-0.8%) after testing a low of 3,885 while failing to hold its 50-day moving average, as well. Fresh and upper support at 3,900-3,875 was tripped and failed to hold. A fade below the latter would suggest additional weakness towards 3,825-3,800.

The Dow tapped a second half low of 32,982 while finishing at 33,044 (-0.8%). Key support at 33,000 was breached but held. A close below this level latter would signal weakness towards 32,750-32,500 and the 200-day moving average.

Volatility Index

The Volatility Index (VIX) extended its winning streak to three-straight sessions following the push to 21.71. Prior and lower resistance at 21.50-22 was cleared but held. A move above the latter and the 50-day moving average would suggest a retest to 23.50-24.

Support is at 20-19.50.

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CSX (CSX, $31.55, down $0.68)

CSX February 33 calls (CSX230203C00033000, $0.40, down $0.20)

Entry Price: $0.75 (1/9/2023)
Exit Target: $1.50
Return: -45%
Stop Target: None

Action: New and upper support at $31.75-$31.50 failed to hold on the tumble to $31.52. A close below the latter and the 50-day moving average would likely push us to the sidelines. Lowered resistance is at $32-$32.25.