Dear Momentum Options Subscriber,

The market traded lower for the majority of Wednesday’s session leading into the latest Fed news. The minutes from July showed that there could be a rate hike in September or possibly December, but no action was taken yesterday. In the end, the rebound off of the lows and into positive territory gave the bulls the win.

The Dow added 22 points, or 0.1%, to settle at 18,573. The blue-chips were red throughout the day, with the bears pushing a low of 18,468. Support at 18,400-18,350 held, but there is risk to 18,200 on a move below the latter. Upper resistance at 18,500-18,600 was tested following the late-day pop to 18,582.

The S&P 500 gained 4 points, or 0.2%, to finish at 2,182. The index traded to a low of 2,168 intraday, with support at 2,180-2,175 getting stretched. Resistance at 2,190-2,200 held late in the day following the push to 2,183.

The Nasdaq advanced by a point, or 0.03%, to close at 5,228. Tech opened a point higher before fading to a low of 5,197. Support at 5,225-5,200 held on the pullback before the turnaround to 5,230. Resistance remains at 5,225-5,250.

The Russell 2000 slipped 3 points, or 0.3%, to end at 1,227. The small-caps stayed underwater throughout the session, with the low checking in at 1,221. Support at 1,230-1,225 held, but a close below 1,220 would be a bearish development. Resistance is at 1,240-1,245.

The S&P 500 Volatility Index ($VIX, 12.19, down 0.45) tested a high of 13.71, with upper resistance at 12.50-13.50 holding. Support at 11.50 was kept in check following the low of 12.14.

From desk to press, futures look like this: Dow (-10); S&P 500 (-2); Nasdaq 100 (-6); Russell (-1.4).

Momentum Options Play List

Closed Momentum Options Trades for 2016: 62-22 (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).


Energous (WATT, $14.07, up $0.15)

WATT November 15 calls (WATT161118C00015000, $1.80, up $0.30)

Entry Price: $1.65 (8/17/2016)

Exit Target: $2.40

Return: 9%

Stop Target: None

Action: The Exit Target for the trade is at $2.40, but it is not a Limit Order at this time.

Resistance is at $14.50-$15. Support is at $14-$13.75.


MGM Resorts International (MGM, $24.43, down $0.06)

MGM September 25 calls (MGM160916C00025000, $0.41, down $0.09)

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

Exit Target: $1.40

Return: -41%

Stop Target: None

Action: Support is at $24.50-$24.25. Resistance is at $24.75-$25.


Bank of America (BAC, $15.15, down $0.02)

BAC September 15 calls (BAC160916C00015000, $0.42, down $0.01)

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

Exit Target: $1.00

Return: -16%

Stop Target: None

Action: Near-term resistance is at $15.25-$15.50. Support is at $15-$14.75.


Rambus (RMBS, $13.49, down $0.06)

RMBS September 14 calls (RMBS160916C00014000, $0.21, down $0.02)

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

Exit Target: $0.80

Return: -48%

Stop Target: None

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

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options