Dear Momentum Options Subscriber,

Gold ($GOLD, $1267.30, up $1.90) is trying to rebound today after falling in five of the past six sessions. The run towards resistance at $1,300 earlier this month was the result of a breakout from the previous March highs near $1,280.

Despite the recent pullback, support at $1,250 and the flattening 50-day moving average is holding. A close below this level would be a bearish development that could lead to a possible backtest to $1,200. A rebound above $1,280 would be a signal to go long.

 

I often mention that the best way to trade gold is by using the SPDR Gold Shares ETF (GLD, $121.97, up $0.99). I have been watching the June option chains to determine whether to possibly go long or short if the aforementioned support and resistance levels are breached.

As far as the market goes this afternoon, the bears have regained their momentum, and they are trying to negate most, if not all, of yesterday’s bullish gains.

The Dow is down 209 points to 17,717, while the S&P 500 is falling 17 points to 2,066. The Nasdaq is lower by 38 points to 4,771, and the Russell 2000 is dropping 10 points to 1,118.

I have updated our current trades below, so let’s go check out the action.

Momentum Options Play List

Closed Momentum Options Trades for 2016: 44-10 (81%). All trades are dated 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 3:10 p.m. EST.

I hereby disclose that I will be participating in the following trade(s).

 

Potash (POT, $16.00, down $0.15)

POT June 15 puts (POT160617P00015000, $0.37, up $0.03)

Entry Price: $0.51 (5/9/2016)

Exit Target: $1.05

Return: -27%

Stop Target: None

Action: Resistance is at $16.25-$16.50. Support is at $15.75-$15.50 if $16 fails to hold.

 

Microsoft (MSFT, $51.03, up $0.01)

MSFT June 47 puts (MSFT160617P00047000, $0.26, down $0.04)

Entry Price: $0.62 (5/3/2016)

Exit Target: $1.25

Return: -58%

Stop Target: None

Action: Resistance is at $51.50-$52. Support is at $50-$49.50.

 

Bank of America (BAC, $14.25, down $0.05)

BAC June 15 calls (BAC160617C00015000, $0.20, flat)

Entry Price: $0.58 (4/28/2016)

Exit Target: $1.20

Return: -66%

Stop Target: None

Action: Resistance is at $14.75-$15. Short-term support is at $14-$13.75.

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options