Dear Momentum Options Subscriber,
Futures were pointing towards a nasty open this morning following the news that China had devalued its currency, the yuan, by 2%. This sparked a rally in the dollar that hurt multinational companies and raised concerns over a new round of currency wars.
With China’s economic growth slowing, the country is trying to improve its exports and described the move as a “one-off depreciation.” This will likely fuel continued currency wars, and other countries may choose to replicate China’s actions.
The bulls have given back most of Monday’s gains, but they are trying to hold near-term support.
The Dow is currently down 226 points to 17,388, while the S&P 500 is declining 22 points to 2,081. The Nasdaq is lower by 63 points to 5,038, and the Russell 2000 is off 13 points to 1,209.
I could have a New Trade ahead of the close, so stay locked and loaded. For now, however, let’s go check on our current positions.
Momentum Options Play List
Closed Momentum Options Trades for 2015: 79-26-2 (74%). 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 12:15 p.m. EST.
I hereby disclose that I will be participating in the following trade(s). Every 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 portfolio.
JPMorgan Chase (JPM, $68.11, down $0.78)
JPM September 70 calls (JPM150918C00070000, $0.65, down $0.22)
Entry Price: $0.80 (8/10/2015)
Exit Target: $1.60
Stop Target: None
Action: Support is at $68 and the 50-day moving average. Resistance is at $70-$71, and the 52-high is at $70.61.
KB Home (KBH, $15.29, down $0.02)
KBH October 16 calls (KBH151016C00016000, $0.58, flat)
Entry Price: $0.52 (8/10/2015)
Exit Target: $1.05
Stop Target: None
Action: Resistance is at $15.50-$15.75 and the 50- and 100-day moving averages. Support is at $15-$14.50.
SPDR Gold Trust ETF (GLD, $106.30, up $0.58)
GLD September 98 puts (GLD150918P00098000, $0.30, down $0.06)
Entry Price: $0.82 (7/28/2015)
Exit Target: $1.65
Stop Target: None
Action: Resistance is at $106-$108. Support is at $104-$103.50.
Trades on Hold — other 2015 Portfolio Open positions (1): 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.
Rigel Pharmaceuticals (RIGL) September 5 calls (from 6/4/15) — Continue to hold.
Editor and Chief Options Strategist