Dear Momentum Options Subscriber,
The bulls will be looking to get their second-straight Friday win today following this morning’s nonfarm payrolls report. Thursday’s results were mixed, as was the action for the week. While the bears are winning on some fronts, a solid session today would give the bulls the overall weekly win.
The Dow fell 22 points, or 0.1%, to settle at 17,895. The blue-chips traded to a high of 17,984 during the first half of the session, but they fell shy of clearing resistance at 18,000-18,100. The second-half fade to 17,816 held support at 17,800-17,700.
The S&P 500 slipped nearly 2 points, or 0.1%, to close just under 2,098. The index pushed upper resistance at 2,100-2,110, as it tapped 2,109 shortly after the open. The backtest to 2,089 held support at 2,090, but there is risk to 2,075-2,070 on a close below this level.
The Nasdaq gained 17 points, or 0.4%, to end at 4,876. Tech made a run into resistance at 4,875-4,900 after peaking at 4,889 within the first hour of trading. The intraday dip to 4,853 held short-term support at 4,850. A move below this level would be a bearish development that could lead to 4,825-4,800.
The Russell 2000 added 2 points, or 0.2%, to finish at 1,149. The small-caps held positive territory for the majority of the session after reaching a high of 1,156. Resistance at 1,150-1,160 was tested before the bears got involved. The low of 1,143 and 4-point pullback held support at 1,140-1,135.
The S&P 500 Volatility Index ($VIX, 14.76, down 0.20) traded down to 14.33, which was its lowest level since June 9. Support at 13.50-12.50 continues to be a headwind. The late-day pop to 15.98 on market weakness easily held resistance at 16.50-17.50.
From desk to press, futures look like this: Dow (+122); S&P 500 (+16); Nasdaq 100 (+26); Russell (+14).
Momentum Options Play List
Closed Momentum Options Trades for 2016: 54-18 (75%). 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 8:00 a.m. EST.
I hereby disclose that I will be participating in the following trade(s).
Altria Group (MO, $69.30, down $0.42)
MO August 70 calls (MO160819C00070000, $1.23, down $0.25)
Entry Price: $1.15 (7/5/2016)
Exit Target: $2.30
Stop Target: $1.25 (Stop Limit)
Action: The Stop Limit at $1.25 was triggered ahead of Thursday’s close, and we are now out of the position. The puts traded to a low of $1.21.
Green Dot (GDOT, $23.36, flat)
GDOT August 25 calls (GDOT160819C00025000, $0.80, up $0.05)
Entry Price: $0.80 (7/7/2016)
Exit Target: $1.60
Stop Target: None
Action: Resistance is at $23.50-$24. Support is at $23-$22.50 and the 50-day moving average.
Energous (WATT, $12.14, down $0.01)
WATT August 12.50 calls (WATT160819C00012500, $1.20, down $0.20)
Entry Price: $1.57 (6/28/2016)
Exit Target: $3.15
Stop Target: $0.75
Action: Support is at $11 and the 50-day moving average if $12 fails to hold. Resistance is at $12.75-$13. The bid/ask spread has widened to $1.15/$1.45 as of yesterday’s close. This could signal that a big move is forthcoming.
Morgan Stanley (MS, $25.69, up $0.54)
MS August 28 calls (MS160819C00028000, $0.27, up $0.06)
Entry Price: $0.79 (6/23/2016)
Exit Target: $1.50
Stop Target: None
Action: Resistance is at $25.75-$26. Support is at $25-$24.75.
Viavi Solutions (VIAV, $6.56, up $0.08)
VIAV September 7 calls (VIAV160916C00007000, $0.26, up $0.04)
Entry Price: $0.55 (6/23/2016)
Exit Target: $1.10
Stop Target: None
Action: Near-term resistance is at $6.75-$7. Support is at $6.50-$6.40.
Editor and Chief Options Strategist