Dear Momentum Options Subscriber,

Wall Street’s jaw dropped following the release of this morning’s Nonfarm Payroll numbers. I mentioned yesterday that there could be a print north of 275,000-300,000, and my top-end estimate was blown away by 21,000.

Expectations from most of the suit-and-ties were in the low 200,000s. I’m not sure how many of the jobs added were “seasonal” jobs, so January’s report will be much more important.

The unemployment rate was unchanged but stayed at a six-year low of 5.8%.

With the economy chugging along, some of the talking heads were babbling about interest rates going up and, in turn, a lower market. The market historically pulls back in a rising interest rate environment, but I believe it will be a good story for the banks in 2015, as they can make more money on their spreads.

I have been hanging out to see if the Dow would trip 18,000 before I went to press, and the blue-chips came within 9 points of triggering another milestone. The index is currently up 70 points to 17,970. Meanwhile, the S&P 500 is gaining 5 points to 2,077.

The Nasdaq is higher by 13 points to 4,782 and, while I would love to see 4,800 trigger, I will settle for a close above 4,775. The Russell 2000 is advancing 8 points to 1,181, and I’m looking for 1,180 to hold into the weekend.

I have updated the current trades and will have a super-packed Monday-morning issue with my updated 10-year charts and thoughts on my February price targets. Until then, have a great weekend.

Momentum Options Play List

Closed Momentum Options Trades for 2014: 95-56 (63%). All trades are dated and time stamped so new subscribers can look at the past history to see how the trades have played out.

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 “Hard Stops” entered to close any trades or “Exit 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 9 a.m. and 12 p.m. – 1 p.m. updates. Also, I will usually give you a heads-up if I think I’m going to send an email outside of these time frames.

All prices given in this update are current as of 2:15 p.m. EST.

Every new Momentum Options recommendation is listed with the price at which I entered my own position. If the price is slightly different than my recommended entry or exit price when you receive the alert, don’t let that keep you from getting into or out of a trade. Occasionally, you might even get a better “fill” price than what is posted in the Open Trades and Closed Trades.

 

iShares Russell 2000 (IWM, $117.68, up $0.87)

IWM January 121 calls (IWM150117C00121000, $0.97, up $0.24)

Entry Price: $0.90 (12/5/2014)

Exit Target: $1.80

Return: 8%

Stop Target: None

Action: Resistance is at $118. If cleared, a run past $120 could be in the works. Near-term support is at $115.

 

PowerShares QQQ (QQQ, $105.49, up $0.12)

QQQ January 107 calls (QQQ150117C00107000, $0.98, up $0.03)

Entry Price: $0.98 (12/5/2014)

Exit Target: $2.00

Return: 0%

Stop Target: None

Action: I have talked about the QQQs making a run to $110, and the recent 52-week high is north of $106. I would like to see $105 hold on any pullback.

 

American Express (AXP, $92.44, up $0.61)

AXP January 95 calls (AXP150117C00095000, $1.05, up $0.22)

Entry Price: $0.75 (12/3/2014)

Exit Target: $1.50

Return: 40%

Stop Target: None

Action: Shares have traded to a high of $92.86 today. Resistance is at $92.50. Support is at $90.

 

JDS Uniphase (JDSU, $13.35, up $0.33)

JDSU January 13 calls (JDSU150117C00013000, $0.80, up $0.15)

Entry Price: $0.65 (12/3/2014)

Exit Target: $1.30

Return: 23%

Stop Target: None

 

JDSU March 14 calls (JDSU150320C00014000, $0.80, up $0.10)

Entry Price: $0.70 (12/3/2014)

Exit Target: $1.40

Return: 14%

Stop Target: None

Action: Resistance is at $13.50-$13.75. Support is at $12.75 and the 50-day moving average. There is additional risk to $12.50 and the 100/200-day moving averages.

You can read my full update on JDSU in the Dec. 3 Alert.

 

Diamond Foods (DMND, $29.43, down $0.10)

DMND December 32 calls (DMND141220C00032000, $0.60, flat)

Entry Price: $0.87 (11/18/2014)

Exit Target: $1.75

Return: -31%

Stop Target: None

Action: Support is at $29. Near-term resistance is at $30.50. Earnings are due out on Monday, Dec. 8, after the close.

You can read my detailed write-up on DMND in the Nov. 19 Mid-Market Update.

 

IMAX (IMAX, $30.53, up $0.22)

IMAX December 32 calls (IMAX1220C00032000, $0.25, flat)

Entry Price: $0.35 (11/12/2014)

Exit Target: $0.70 (Limit Order on Half)

Return: -29%

Stop Target: None

Action: Support is at $30. Resistance is at $31.50-$32.

 

International Business Machines (IBM, $163.17, down $0.88)

IBM January 170 calls (IBM150117C00170000, $0.90, down $0.15)

Entry Price: $1.75 (11/10/2014)

Exit Target: $3.50

Return: -49%

Stop Target: $0.50

Action: If IBM would have shown strength today, the Dow easily would have tripped 18,000. Resistance is at $165, and a close above this level will likely lead to some short-covering and a possible push towards $170. Support is at $163.50-$162.50.

You can read more about why I like this trade and its risk/reward setup in the Nov. 11 Pre-Market Update.

 

Flextronics (FLEX, $11.30, up $0.03)

FLEX January 11 calls (FLEX150117C00011000, $0.55, flat)

Entry Price: $0.68 (9/5/2014)

Exit Target: $1.25

Return: -18%

Stop Target: None

Action: Shares have traded to a high of $11.32 today. Resistance is at $11.50, and a close above this level should get the 52-week high of $11.83 in play. Support is at $11, with backup at $10.75 and the 100-day moving average.

 

Trades on Hold — other 2014 Portfolio Open positions (2): These are trades that are still open in the portfolio but are down over 50%. They have longer expiration dates and are on “hold” but are not worth mentioning until they turn around. This means I would not open any new positions. I’m still keeping track of the trades and will record the results accordingly when the trade closes or if the options expire. Click on the Open Trades and Closed Trades pages to see all open and closed positions.

Rubicon December 8 calls (From August 2014) — Continue to hold.

Fortinet December 29 calls (from September 2014) — Continue to hold.

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options