Dear Momentum Options Subscriber,
Today’s choppy action seems to be par for the course considering that Wall Street is waiting for tomorrow’s nonfarm payroll numbers to cross the tape. The bears have controlled much of the session, but the bulls have touched green territory in some areas to keep things interesting.
Data released this morning revealed that jobless claims dropped by 5,000 to 249,000 last week versus the forecast for a reading of 256,000 first-time claims. A better-than-expected jobs report tomorrow could give the market a lift, but it would once again bring up the topic of another potential rate hike.
I have been busy today setting up our next several trades, as our portfolio has room for five to 10 more positions. However, given market conditions, I want to be careful about opening new trades, as the current trading range can hurt option time premiums. As I’ve mentioned before, I am looking mainly at options with November and December expiration dates, as the regular October options expire two weeks from tomorrow.
The good news is that there could be a breakout over the next week or so, as it feels like the market doesn’t want to go lower. However, I often say that the bears like to take the elevator lower, so a pullback over the next two weeks can’t be discounted.
Heading into the final hour of trading, the Dow is lower by 22 points to 18,258, while the S&P 500 is gaining a point to 2,160. The Nasdaq is down 7 points to 5,308, and the Russell 2000 is off 2 points to 1,245.
I have updated our current trades below, so let’s go check the tape.
Momentum Options Play List
Closed Momentum Options Trades for 2016: 74-25 (75%). 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 2:30 p.m. EST.
I hereby disclose that I will be participating in the following trade(s).
Kroger (KR, $29.32, up $0.48)
KR November 27.50 puts (KR161118P00027500, $0.35, down $0.13)
Entry Price: $0.50 (10/4/2016)
Exit Target: $1.00
Stop Target: None
Action: Resistance is at $29.50. Near-term support is at $29.25-$29.
Halozyme Therapeutics (HALO, $12.26, down $0.05)
HALO November 13 calls (HALO161118C00013000, $0.90, flat)
Entry Price: $1.07 (9/27/2016)
Exit Target: $2.15
Stop Target: $0.55 (Stop Limit)
Action: Near-term support is at $12.25-$12. Resistance is at $12.25-$12.50.
Goodyear Tire & Rubber (GT, $32.86, up $0.20)
GT October 33 calls (GT161021C00033000, $0.65, flat)
Entry Price: $0.75 (9/22/2016)
Exit Target: $1.50
Stop Target: $0.30 (Stop Limit)
Action: Resistance is at $33. Support has moved up to $32.75-$32.50.
Viavi Solutions (VIAV, $7.38, flat)
VIAV December 8 calls (VIAV161216C00008000, $0.22, flat)
Entry Price: $0.51 (8/19/2016)
Exit Target: $1.05
Stop Target: $0.15 (Stop Limit)
Action: Resistance is at $7.45-$7.50 and the 50-day moving average. Support is at $7.25-$7.20.
Editor and Chief Options Strategist