MomentumOptions.com Pre-Market Update for 1/29/2024

Big Week for Earnings

8:00am (EST)

Video:

https://screenpal.com/watch/cZVUf6VJ7hb

Commentary

The stock market was mixed on Friday despite better-than-expected news concerning inflation. A disappointing earnings forecast by Intel (INTC) weighed on Tech after the company beat by nine cents but lowered first quarter earnings to 13 cents a share.

The Nasdaq had its six-session winning streak following the pullback to 15,433 and close at 15,455 (-0.4%). Fresh and upper support at 15,450-15,300 was tripped but held. A drop below the latter would suggest weakness towards 15,150-15,000. Resistance is at 15,500-15,650 with Wednesday’s 52-week peak at 15,629.

The S&P 500 traded up to 4,906 while ending slightly lower at 4,890 (-0.1%). Current and lower resistance at 4,900-4,950 was cleared but held for the third-straight day. A move above the latter would imply strength towards 5,000-5,050. Support remains at 4,850-4,800.

The Dow finished at 38,109 (+0.2%) with the intraday all-time high hitting 38,215. New and lower resistance at 38,250-38,500 was challenged and held. A close above the latter would be an ongoing bullish signal for upside to 38,750-39,000. Support remains at 38,000-37,750.

Volatility Index

The Volatility Index (VIX) tagged a high of 14.10 before ending in the red. Lower resistance at 14-14.50 was topped but held. A move above the latter would indicate another trip to 15-15.25 and the 200-day moving average. Key support is at 13 and the 50-day moving average.

Monday’s earnings announcements:

Before the open: None

After the close: Cleveland-Cliffs (CLF), F5 Networks (FFIV), Whirlpool (WHR)

Economic News

None

Market Thoughts

The height of the 4Q earnings season comes this week with nearly 20% of the S&P 500 reporting earnings. Big Tech numbers from Apple (AAPL), Amazon (AMZN), Meta Platforms (META), Alphabet (GOOG) and Microsoft will certainly impact the market and could decide if all-time highs remain in play, or a February fade is in store.

Obviously, there are too many companies for us to list them all but we do try to highlight some of the stocks that could be making the biggest moves this week based on earnings. Boeing (BA) and Merck (MRK) highlight some of the companies reporting and represent the Dow.

Meanwhile, the Federal Open Market Committee (FOMC) will have its first meeting of the year with its two-day policy gig starting on Tuesday and an announcement on Wednesday afternoon. Wall Street has been betting the central bank will keep rates steady with the futures market predicting a 97% probability the Fed will not cut rates.

All of this action, could move the market up or down 2%-3% by the time the dust settles on Friday. The major indexes are still at or near overbought levels with the RSI (relative strength index) readings hovering near 70.

The slight pullbacks after Christmas and to start the New Year pushed RSI levels for the major indexes towards 50 before another rally ensued afterwards to current levels. We mentioned February is typically a bearish month for the market and we have talked about a top coming into play once Apple reports (this Thursday).

We predicted this scenario last August and it played out perfectly. History often repeats itself and the timing of a much need pullback and consolidation period is due. However, with the major indexes now in bull market territory and up roughly 20%-25% from the October lows, buying could continue for another week or so.

Our late December Price targets of Nasdaq 15,150-15,300; Dow 38,000-38,250; and S&P 4,850-4,900 remain in play with the Nasdaq clearing the latter. We have talked about Nasdaq 16,000; S&P 5,000; and Dow 40,000 as nice round numbers Wall Street is pushing for and this week will be crucial in keeping these targets in focus.

Key support levels to watch going forward, and especially after Friday’s close will be at: Nasdaq 14,800; S&P 4,700; and Dow 37,000. As for the Russell, the index is trapped between 1,950-2,000 with a close below or above these levels being a good clue on how the other major indexes might respond.

We are wrapping up a perfect January as we have gotten off to a great start for 2024. We believe 2024 is setting up to be just as volatile as last year and we are excited to be trading the action. On that note, stay locked-and-loaded as we will likely have a new trade at some point this week.

Momentum Options Play List

Closed Momentum Options Trades for 2024: 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 we list one. We will send out a “Profit Alert” or “New Trade” if we 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.

Ford Motor (F, $11.39, up $0.05)

F March 11 puts (F240315P00011000, $0.45, down $0.01)

Entry Price: $0.50 (1/25/2024)
Exit Target: $1.00
Return: -10%
Stop Target: None

Action: Key resistance at $11.50 was kissed and held on the session peak. Support is at $11.25-$11 and the 50-day moving average.

ProShares UltraPro Short QQQ (SQQQ, $12.19, up $0.22)

SQQQ February 16 calls (SQQQ240216C00016000, $0.06, flat)

Entry Price: $0.60 (1/3/2024)
Exit Target: $1.20
Return: -90%
Stop Target: None

Action: Fresh and lower resistance at $12-$12.25 was cleared and held following the bounce to the latter and the session high. Support is at $11.75-$11.50.