Dear Momentum Options Subscriber,

The bulls rebounded to push record highs on Thursday while clearing and holding key resistance levels. The major indices stayed strong all session long, and the small-caps are now the only group left waiting to join the party at all-time highs.

The Dow jumped 117 points, or 0.6%, to settle at 18,613. The blue-chips traded to an all-time high of 18,638 and held upper resistance at 18,500-18,600. Additional fluff targets are at 18,800-19,000. Rising support is at 18,400-18,350.

The S&P 500 added 10 points, or 0.5%, to end at 2,185. The index made a record run to 2,188, which pushed my near-term upper fluff target of 2,200. Support is trying to move up to 2,180-2,175, but a close back below 2,170 would be a warning signal.

The Nasdaq gained 23 points, or 0.5%, to close at 5,228. Tech tested an intraday peak of 5,235 to keep upper resistance at 5,225-5,250 in play. Support remains at 5,200-5,175, but a close below the latter would likely signal a near-term market top.

The Russell 2000 advanced 5 points, or 0.5%, to finish at 1,229. The small-caps came close to falling into negative territory after opening at 1,224, although they held the 1,223 level. The run to 1,231 fell shy of short-term resistance at 1,235-1,240-1,250. Support is at 1,225-1,220.

The S&P 500 Volatility Index ($VIX, 11.68, down 0.37) traded in a tight range between 11.38-12.11. Support is at 11.50, which is a level I would like to see the bulls get below this weekend. Resistance is at 12.50-13.50.

From desk to press, futures look like this: Dow (-18); S&P 500 (-2); Nasdaq 100 (-3); Russell (-3).

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, $24.89, up $0.26)

MGM September 25 calls (MGM160916C00025000, $0.70, up $0.09)

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

Exit Target: $1.40

Return: 0%

Stop Target: None

Action: Shares traded to a high of $24.99 yesterday. Resistance is at $24.75-$25. The 52-week high for MGM is at $25.29. Support is at $24.50-$24.25, followed by $23.75 and the 50-day moving average.

 

Bank of America (BAC, $14.88, up $0.07)

BAC September 15 calls (BAC160916C00015000, $0.34, up $0.01)

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

Exit Target: $1.00

Return: -32%

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, $13.56, down $0.03)

RMBS September 14 calls (RMBS160916C00014000, $0.28, down $0.11)

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

Exit Target: $0.80

Return: -30%

Stop Target: None

Action: Support is at $13.50-$13.25. Resistance is at $13.75-$14.

 

Vuzix (VUZI, $7.75, up $0.40)

VUZI September 10 calls (VUZI160916C00010000, $0.33, up $0.03)

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

Exit Target: $2.00

Return: -66%

Stop Target: None

Action: Fresh resistance is at $7.75-$8. Support has moved up to $7.50-$7.25.

 

Viavi Solutions (VIAV, $7.33, up $0.05)

VIAV September 7 calls (VIAV160916C00007000, $0.55, up $0.04)

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

Exit Target: $1.10

Return: 0%

Stop Target: None

Action: Resistance is at $7.50. Support is at $7, with $6.90-$6.85 and the 50-day moving average serving as backup.

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options