MomentumOptions.com Pre-Market Update for 4/13/2023
Trading Ranges Remain Intact
8:00am (EST)
The stock market pulled back on Wednesday despite better-than-expected economic news that showed consumer prices rose at the slowest pace in nearly two years. Specifically, the Consumer Price Index (CPI) rose 0.1% in March, down from February’s print of 0.4%.
The action kept the major indexes in mini trading ranges despite higher highs on the open. Volatility has also confirmed the slack action as both the bulls and bears hold key resistance and support levels.
The Nasdaq made a first half run to 12,134 before settling at 11,929 (-0.9%). Upper support at 12,000-11,850 failed to hold. A drop below the latter would imply a further slide towards 11,750-11,600 and the 50-day moving average.
The S&P 500 ended at 4,105 (-0.4%) with the low touching 4,086. Key support at 4,100 was breached and failed to hold. Continued closes under this level would suggest a retest to 4,050-4,000 and the 50-day moving average. Resistance is at 4,150-4,200.
The Dow faded to an afternoon low of 33,593 while finishing at 33,646 (-0.1%). Near-term and upper support at 33,500-33,250 was challenged but easily held. A close below the latter would signal additional weakness towards 33,000-32,750 and the 50-day moving average. Resistance is at 33,750-34,000.
Volatility Index
The Volatility Index (VIX) traded to a fresh monthly low of 18.25 with upper support at 18.50-18 getting breached but holding. A close below the latter would be a very bullish development for the market with weakness towards 17.50-17. Resistance remains at 19.50-20.
Thursday’s earnings announcements:
Before the open: Delta Air Lines (DAL), Fastenal (FAST), Infosys Technologies (INFY), Progressive (PGR)
After the close: Lakeland Industries (LAKE), Washington Federal (WAFD)
Economic news:
Producer Price Index – 8:30am
Initial Jobless Claims – 8:30am
Market Thoughts
The Nasdaq is currently in a nine-session range while the S&P 500 and the Dow are in seven session consolidation patterns. Key support levels remain at: Dow 32,500; S&P 4,000; and Nasdaq 11,800.
Volatility is in a 10-session trading range after closing back above the 18.50 level and clearing but holding 20 on Monday. There is wiggle room up to 20.50-21 with a close above the latter and the 50-day moving average being a bearish signal for the overall market.
We have been sounding like a broken record by mentioning a close below 18 on the VIX and the March 3rd low at 18.16 would be a bullish setup for the major indexes. The February 2nd 52-week low is at 17.06.
We have talked about the current action lasting into Friday, or possibly next week, as 1Q earnings season gets underway. As a reminder, Citigroup (C), JP Morgan (JPM), PNC Financial (PNC), and Wells Fargo (WFC) will announce numbers ahead of tomorrow’s opening bell.
We will have a more detailed outlook on Monday as there could be some added volatility on Friday. We could have a New Trade at some point today so stay locked-and-loaded.
Momentum Options Play List
Closed Momentum Options Trades for 2023: 10-4 (71%). 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.
None – It is rare we don’t have an open trade but we often mention we try to avoid trading ranges and option premium decay when we see them coming.