Dear Momentum Options Subscriber,

All year long, the bulls and bears have walked the plank with each side only inches from falling into deeper peril before things suddenly get better. I often say one session doesn’t make a trend and the return of the longer-term one-year “trading range” is back still play.

The Dow added 41 points, or 0.2%, to close at 18,355. The blue-chips kissed 18,283 with backup support at 18,200-18,000 hanging in the balance. Lower resistance at 18,350-18,400 was tested and held as the index went out at its session high.

The S&P 500 jumped 6 points, or 0.2%, to end at 2,163. The index held lower support at 2,160-2,150 after testing 2,152 before the run to the day’s high at the closing bell. Resistance is at 2,170-2,175 following the move back above 2,160.

The Nasdaq gained 22 points, or 0.4%, to finish at 5,159. Tech tapped 5,128 on the open with short-term support at 5,125-5,100 holding. Resistance is at 5,175-5,200 following yesterday’s run to the high into the close.

The Russell 2000 jumped 10 points, or 1.4%, to settle at 1,212. The small-caps tested a lower low than Tuesday’s 1,199 print by a point. I didn’t read too much into it as shaky support at 1,200-1,195 is now my main focus of concern. Resistance is at 1,220-1,225 following the finish above 1,210.

The S&P 500 Volatility Index ($VIX, 12.86, down 0.51) raced to 13.91 with upper resistance at 14.50-15 holding. The second-straight close below 13.50 a happy ending, but a close below 12.50 is needed today or ahead of the weekend.

From desk to press, futures look like this: Dow (+57); S&P 500 (+6.5); Nasdaq 100 (+7.5); Russell (+2.1).

Momentum Options Play List

Closed Momentum Options Trades for 2016: 61-20 (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 6:00 a.m. EST.

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

 

Rambus (RMBS, $13.43, up $0.27)

RMBS September 14 calls (RMBS160916C00014000, $0.29, up $0.06)

Entry Price: $0.40 (8/1/2016)

Exit Target: $0.80

Return: -28%

Stop Target: None

Action: Wednesday’s high tapped $13.43. Resistance is at $13.25-$13.50. Support is at $13.25-$13.

 

Vuzix (VUZI, $7.84, up $0.20)

September 10 calls (VUZI160916C00010000, $0.57, up $0.05)

Entry Price: $0.97 (7/27/2016)

Exit Target: $2.00

Return: -41%

Stop Target: None

Action: Resistance is at $8 and yesterday’s peak. Support is at $7.50.

 

Green Dot (GDOT, $23.57, down $0.05)

GDOT August 25 calls (GDOT160819C00025000, $0.60, up $0.11)

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

Exit Target: $1.60

Return: -25%

Stop Target: None

Action: Support is at $23.75-$23.50. Resistance is at $24-$24.25. Earnings are due out after today’s close.

 

Viavi Solutions (VIAV, $7.15, up $0.14)

VIAV September 7 calls (VIAV160916C00007000, $0.43, flat)

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

Exit Target: $1.10

Return: -22%

Stop Target: None

Action: Resistance is at $7.25. Support is at $7 with $6.90-$6.85 and the 50-day moving average serving as backup. Earnings are due out August 11th.

 

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options