Dear Momentum Options Subscriber,

The bears made a little noise on Tuesday, but they were unable to get a clean sweep, as the Dow closed higher for the eighth-straight session. The bulls held rising support, and they still look strong enough to push higher highs.

The Dow gained 26 points, or 0.1%, to settle at 18,559. The blue-chips tested a low of 18,489 during the choppy first half of the action, with support at 18,400-18,350 holding for the sixth-straight session. The push to 18,562 came up short of challenging upper resistance at 18,600. A close above this level would be bullish towards my near-term fluff targets of 18,800-19,000.

The S&P 500 gave back 3 points, or 0.1%, to close at 2,163. The index traded in negative territory throughout the session, with the bears pushing 2,159 intraday. Support is at 2,160-2,150, with risk to 2,140-2,135 on a move below the latter. Resistance is at 2,175-2,180.

The Nasdaq fell 19 points, or 0.4%, to end at 5,036. Tech stayed underwater on Tuesday but held support at 5,025-5,000 after bottoming at 5,028. Resistance has moved down to 5,075-5,050 over the short term.

The Russell 2000 declined 7 points, or 0.6%, to finish at 1,200. The small-caps also traded in the red throughout the day, with the low checking in at 1,198. There is risk to 1,190 on continued weakness. Resistance is at 1,210-1,215.

The S&P 500 Volatility Index ($VIX, 11.97, down 0.47) stayed elevated for much of the session, with the bears pushing a high of 12.83. Resistance at 13.50 held before the final-hour plunge to 11.94 into the closing bell. This was a very bullish sign, but support at 11.50-10 is still in play.

From desk to press, futures look like this: Dow (+45); S&P 500 (+4); Nasdaq 100 (+12); Russell (+2).

Momentum Options Play List

Closed Momentum Options Trades for 2016: 59-18 (77%). 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).


MGM Resorts International (MGM, $23.15, down $0.24)

MGM August 24 calls (MGM160819C00024000, $0.55, down $0.10)

Entry Price: $0.74 (7/15/2016)

Exit Target: $1.50

Return: -26%

Stop Target: None

Action: Support is at $23.25-$23 and the 50-day moving average. Near-term resistance is at $23.75-$24.


Flextronics International (FLEX, $12.92, up $0.05)

FLEX August 13 calls (FLEX160819C00013000, $0.46, up $0.06)

Entry Price: $0.44 (7/14/2016)

Exit Target: $1.00

Return: 5%

Stop Target: None

Action: Tuesday’s high reached $13.05. Resistance is at $13-$13.25. The 52-week high is at $13.23. Support is at $12.75-$12.50.


Green Dot (GDOT, $23.86, up $0.03)

GDOT August 25 calls (GDOT160819C00025000, $0.80, up $0.01)

Entry Price: $0.80 (7/7/2016)

Exit Target: $1.60

Return: 0%

Stop Target: None

Action: Support is at $23.50-$23. Near-term resistance is at $24.25-$24.50.


Energous (WATT, $11.85, down $0.07)

WATT August 12.50 calls (WATT160819C00012500, $0.80, flat)

Entry Price: $1.57 (6/28/2016)

Exit Target: $3.15

Return: -49%

Stop Target: $0.50 (Stop Limit)

Action: Support is at $11.75-$11.50. Resistance is at $12-$12.25.


Viavi Solutions (VIAV, $6.95, down $0.08)

VIAV September 7 calls (VIAV160916C00007000, $0.40, up $0.03)

Entry Price: $0.55 (6/23/2016)

Exit Target: $1.10

Return: -27%

Stop Target: None

Action: Support is at $6.80-$6.75. Resistance is at $7.15-$7.25.

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options