MomentumOptions.com Pre-Market Update for 1/30/2023
Nasdaq Recovers 200-Day Moving Average
8:00am (EST)
The stock market shrugged off disappointing earnings from Intel (INTC) and a weak open to remain in a strong January uptrend. Friday’s gains gave the bulls their third weekly win over the past month with volatility falling to a fresh 52-week low.
The Nasdaq traded to an afternoon high of 11,691 while going out at 11,621 (+1%). Key resistance at 11,500 and the 200-day moving average were cleared and held. Continued closes above this level keeps upside towards 11,750-11,900 in play.
The Russell 2000 closed at 1,911 (+0.4%) after topping out at 1,918. Key resistance at 1,900 was reclaimed. Continued closes above this level would imply a further trip to 1,925-1,950. Below is a chart of the IWM.
The S&P 500 peaked at 4,094 before settling at 4,070 (+0.3%). Key resistance at 4,100 was challenged but held. A surge above this level would indicate strength towards 4,150-4,200.
The Dow finished at 33,978 (+0.1%) with the intraday high hitting 34,164. Lower resistance at 34,000-34,250 was cleared but held. A move above the latter would indicate strength to 34,500-34,750 with the December 13th peak at 34,712.
Volatility Index
The Volatility Index (VIX) fell for the sixth-straight session after trading to a fresh 52-week low of 17.97. Key support at 18 was breached but held. Continued closes below this level would be an ongoing bullish signal for the market with further weakness to 17-16.50.
Lowered resistance is at 18.50-19.
Market Thoughts
The market could be extremely volatile this week with a heavy dose of Tech earnings and another Fed update midweek. Some of the companies reporting numbers include Caterpillar (CAT) Exxon Mobil (XOM) and Meta Platforms (META).
Apple (AAPL), Amazon (AMZN) and Alphabet (GOOG) all announce earnings after Thursday’s closing bell. Their results will have a huge impact on how Friday unfolds.
As for interest rates, the suit-and-ties have penciled-in a quarter point rate hike with Fed Chair Powell comments being the more important subject matter.
I have been talking about a run to the December highs throughout the month and the importance of the VIX recovery the 18 level. Both are now in play with the latter being the most important.
This week has the opportunity to be a classic buy the rumor, sell the news setup. Or, a continued breakout towards August and September resistance levels for the major indexes.
With the portfolio empty, we will most likely get into a new trade, or two, this morning and this week.
Momentum Options Play List
Closed Momentum Options Trades for 2023: 3-1 (75%). 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 Otherwise, follow instructions at all times in the updates on Monday’s and Thursday’s along with the Text Alerts throughout the week.
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