Dear Momentum Options Subscriber,

Add the Nasdaq to the club, as it was the latest index to tap record all-time highs in recent weeks. Although there was a little late-day weakness on Tuesday, the bulls showed some strength to get the win. The bears are looking for an opening, but we may have to wait for the small-caps to clear 1,300 before we can start looking for a possible near-term market top.

The Dow added 3 points, or 0.02%, to close at 18,533. The blue-chips traded to a high of 18,585 mid-day, with upper resistance at 18,500-18,600 holding. The fade to 18,507 into the closing bell held support at 18,400-18,350.

The S&P 500 gained nearly a point, or 0.04%, to finish at 2,181. The index pushed another all-time intraday high of 2,187, and it remains on track to test blue-sky resistance at 2,200. Near-term support at 2,175-2,170 held following the second-half dip to 2,178.

The Nasdaq popped a 12-pack, or 0.2%, to settle at 5,225. Tech traded to an all-time intraday high that cleared the prior record high just below 5,232. The all-time closing high held my lower fluff targets of 5,225-5,250. Support is at 5,200-5,175.

The Russell 2000 climbed a point, or 0.1%, to end at 1,231. The small-caps made a run to 1,233 but failed to clear resistance at 1,240-1,250. Support is at 1,225-1,220, followed by 1,210-1,200.

The S&P 500 Volatility Index ($VIX, 11.66, up 0.16) tested a fresh 52-week low of 11.02 before closing higher for the second-straight session. Support is at 11.50, and continued closes below this level could lead to 10.50-10. Resistance is at 12.50-13.50.

From desk to press, futures look like this: Dow (+11); S&P 500 (+3); Nasdaq 100 (+5); Russell (+1).

Momentum Options Play List

Closed Momentum Options Trades for 2016: 61-21 (74%). 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 8:00 a.m. EST.

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

 

MGM Resorts International (MGM, $24.90, up $0.26)

MGM September 25 calls (MGM160916C00025000, $0.76, up $0.11)

Entry Price: $0.70 (8/8/2016)

Exit Target: $1.40

Return: 9%

Stop Target: None

Action: Tuesday’s peak reached $24.98. Resistance is at $24.75-$25. The 52-week high for MGM is at $25.29. Support is at $24.25-$24, followed by $23.75 and the 50-day moving average.

 

Bank of America (BAC, $15.19, up $0.06)

BAC September 15 calls (BAC160916C00015000, $0.50, up $0.01)

Entry Price: $0.50 (8/8/2016)

Exit Target: $1.00

Return: 0%

Stop Target: None

Action: Resistance is at $15.25-$15.50. Support is at $15-$14.75, followed by $14.50 and the 200-day moving average.

 

Rambus (RMBS, $13.80, up $0.21)

RMBS September 14 calls (RMBS160916C00014000, $0.39, up $0.07)

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

Exit Target: $0.80

Return: -3%

Stop Target: None

Action: The 52-week high is at $14.17, with yesterday’s high reaching $13.86. Resistance is at $13.75-$14. A move above the latter would be bullish. Support is at $13.50-$13.25.

 

Vuzix (VUZI, $7.61, up $0.37)

VUZI September 10 calls (VUZI160916C00010000, $0.40, up $0.09)

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

Exit Target: $2.00

Return: -59%

Stop Target: None

Action: Support is at $7.75-$8. Fresh support is at $7.50-$7.25.

 

Viavi Solutions (VIAV, $7.33, up $0.08)

VIAV September 7 calls (VIAV160916C00007000, $0.55, up $0.03)

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

Exit Target: $1.10

Return: 0%

Stop Target: None

Action: Shares traded to a 52-week high of $7.37 yesterday, with fresh resistance being established at $7.25-$7.50. Support is at $7, with $6.90-$6.85 and the 50-day moving average serving as backup. Earnings are due out on Thursday.

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options