Dear Momentum Options Subscriber,

Futures were pointing to a nasty open and a test to the August lows this morning, and the big concern was whether or not support would hold. So far it has, and today’s close will be one of the more important tells in recent weeks.

If current levels hold, the bulls might be safe. However, a close below the support levels I have been highlighting could lead to panic selling.

The Dow is currently lower by 233 points to 17,115, while the S&P 500 is giving back 25 points to 2,053. The Nasdaq is down 90 points to 4,928, and the Russell 2000 is declining 13 points to 1,189.

I have covered our current trades below, but there is no action to take at this time, and I don’t anticipate that it will be a busy afternoon unless the baby gets thrown out with the bathwater. If that’s the case, I could add additional put positions, but, for now, hang tight.

Momentum Options Play List

Closed Momentum Options Trades for 2015: 82-26-2 (75%). 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 12:25 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.

 

Krispy Kreme Doughnuts (KKD, $17.78, down $0.22)

KKD November 17 puts (KKD151120P00017000, $1.05, up $0.10)

Entry Price: $0.95 (8/19/2015)

Exit Target: $1.90

Return: 11%

Stop Target: None

Action: Support is at $17.75-$17.50. A close below the latter would be a bearish development, which is what we are looking for. Resistance is at $18-$18.25.

This morning, the company announced that it will report earnings on Sept. 9, after the close.

 

iShares Russell 2000 (IWM, $117.94, down $1.47)

IWM September 123 calls (IWM150918C00123000, $0.49, down $0.20)

Entry Price: $0.78 (8/19/2015)

Exit Target: $1.60

Return: -37%

Stop Target: None

Action: Support is at $118, and I like the trade as long at $117.50 holds. Resistance is at $119-$120.

 

Bank of America (BAC, $16.96, down $0.50

BAC September 18 calls (BAC150918C00018000, $0.10, down $0.11)

Entry Price: $0.28 (8/17/2015)

Exit Target: $0.60-$0.90

Return: -64%

Stop Target: None

Action: There is additional risk to $16.75 on a close below $17. Resistance is at $17.25-$17.50.

You can read my full write-up on BAC in Monday’s Pre-Market Update.

 

PowerShares QQQ Trust (QQQ, $108.01, down $2.12)

QQQ September 112 Weekly calls (QQQ150904C00112000, $0.19, down $0.28)

Entry Price: $0.95 (8/13/2015)

Exit Target: $1.90

Return: -80%

Stop Target: $0.35

Action: Support is at $108. Resistance is at $110-$111.

 

JPMorgan Chase (JPM, $66.70, down $0.90)

JPM September 70 calls (JPM150918C00070000, $0.33, down $0.17)

Entry Price: $0.80 (8/10/2015)

Exit Target: $1.60

Return: -59%

Stop Target: None

Action: Support is at $66-$65.75 and the 100-day moving average. Resistance is at $68.

 

Trades on Hold — other 2015 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.

Rigel Pharmaceuticals (RIGL) September 5 calls (from 6/4/15) — Continue to hold.

SPDR Gold Trust ETF (GLD) September 98 puts (from 7/28/15) — Continue to hold.

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options