MomentumOptions.com Pre-Market Update for 10/17/2024
Small-Caps Clear Key Resistance
8:00am (EST)
Commentary
The market rebounded on Wednesday to keep all-time and fresh 52-week highs in play. The small-caps outperformed after jumping 1.6% while closing at a three-year high.
The Nasdaq ended at 18,367 (+0.3%) with the intraday high hitting 18,383. Lower resistance at 18,450-18,600 was cleared but held. A move above the latter and the July 11th record peak at 18,671 would signal strength to 18,700-18,850. Support is at 18,150-18,000.
The S&P 500 topped out at 5,846 before finishing at 5,842 (+0.5%). Key resistance at 5,850 was held. A pop above this level and Tuesday’s record high at 5,870 would imply upside towards 5,900-5,950. Support is at 5,750-5,700.
The Dow went out at 43,077 (+0.8%) after making an intraday trip to 43,100. Lower resistance at 43,000-43,250 was recovered. Continued closes above this level would indicate ongoing strength to 43,750-44,000. Support is at 42,750-42,500.
Volatility Index
The Volatility S&P 500 Index (VIX) traded down to 19.45 with key support at 20 getting tripped and failing to hold. A close below the latter would signal weakness to 19-18.50 and the 50-day moving average would be an ongoing bullish development for the market. Resistance remains at 22-24.
Thursday’s earnings announcements:
Before the open: Blackstone (BX), KeyCorp (KEY), M&T Bank (MTB), Nokia (NOK), Taiwan Semiconductor (TSM)
After the close: Crown Holdings (CCK), Intuitive Surgical (ISRG), Netflix (NFLX)
Economic news:
Initial Jobless Claims – 8:30am
Retail Sales – 8:30am
Home Builder Confidence Index – 10:00am
Market Thoughts
The Russell showed strength on Tuesday despite the rest of the major indexes falling 1%, on average. The intraday high reached 2,272 and we have been highlighting on the chart a possible breakout on continued closes above 2,260. This was a good clue a breakout could occur despite the overall weakness.
The small-caps closed slightly above 2,260 twice in July and challenged this level in back-to-back sessions on September 18th and 19th. Wednesday’s surge shows a nice breakout on the chart with the index notching its highest closing level in nearly three years.
The Russell is now within spitting distance of its 52-week peak at 2,299. Continued closes above 2,300 gets the all-time high at 2,444 from November 2021 in focus. Key support is now at 2,225.
Chart
The Dow remains in its current uptrend channel with the chart showing upside towards 44,000-44,500. A close below 42,500 and out of the channel would likely lead to another backtest towards 42,000 and a level of key support that has been holding since mid-September.
Chart
The Nasdaq has also maintained its current uptrend channel and it can be adjusted if 18,000 comes back into play. There is wiggle room down to 17,750 on a drop below this level. A near-term top would occur on a close below 17,500 and the 50-day moving average.
We talked about Tech needing to clear and hold 18,500 and Monday and Tuesday’s highs were at 18,547 and 18,564, respectively. The index did close at 18,502 to tease the bulls on Monday but Tuesday’s 1% drubbing and close at 18,315 is another reason why we say wait for multiple closes above or below resistance or support to confirm price action.
Chart
The S&P tagged a lifetime peak of 5,871 on Monday and kissed 5,870 on Tuesday. The price action remains in the upper half of the current uptrend channel and a target of 6,000. A fade below 5,700 would be a slightly bearish signal as it represents the area of the triple-top breakout from September 19th.
Chart
The Volatility Index (VIX) settled below 20 for the second-time this week. The bulls will now focus on getting the action below 17.50 to confirm an ongoing bullish month. The bears need to get the VIX above 24 to create some chaos.
Chart
We have update our current trades so let’s go check the tape.
Momentum Options Play List
Closed Momentum Options Trades for 2024: 57-10 (85%, 27 triple-digit winners). 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.
Snap (SNAP, $10.76, down $0.28)
SNAP November 13 calls (SNAP241115C00013000, $0.60, down $0.10)
Entry Price: $0.60 (10/11/2024)
Exit Target: $1.20
Return: 0%
Stop Target: None
Action: Key support at $10.50 held on the dip to $10.76. Resistance is back at $11-$11.25 again.
Monday’s and Tuesday’s high touched $11.20 and $11.21 and we were looking for continued closes above $11.25. This would get our next target zones of $12.35 and $13 and the 200-day moving average in play.
Newell Brands (NWL, $7.73, up $0.24)
NWL November 8 calls (NWL241115C00008000, $0.45, up $0.10)
Entry Price: $0.40 (9/27/2024)
Exit Target: $0.80
Return: 13%
Stop Target: None
Action: Lower resistance at $7.50-$7.75 was reclaimed with the high at $7.74. Closes above $8 would be a very bullish breakout that could quickly get $9 in the picture. Support is at $7.50-$7.25 and the 200-day and 50-day moving averages.
Goodyear Tire & Rubber (GT, $8.38, up $0.10)
GT January 10 calls (GT250117C00010000, $0.45, flat)
Entry Price: $0.60 (8/29/2024)
Exit Target: $1.20
Return: -25%
Stop Target: None
Action: Lower resistance at $8.50-$8.75 was challenged and held with the peak reaching $8.43. Support is at $8.25-$8.
A readjusted downtrend channel shows closes above $8.50 to be slightly bullish with $9 our target area for a breakout. Continued closes above $9 could lead a short-covering rally to $10.50-$11.50.
