Dear Momentum Options Subscriber,
The market has traded within a tight range and on both sides of the ledger today ahead of this afternoon’s Federal Open Market Committee (FOMC) minutes, which will be released at 2 p.m. EST. Anxiety over the next potential rate hike remains, and Wall Street will be digesting the news afterwards to get a better idea about what the zombies are thinking.
While a few words and spin will come into play, today’s battle is crucial in determining if the September lows are in danger of being breached or if the trading range will continue. I mentioned previously that I expect the market to be range-bound this week and, if this setup plays out, it’s possible that a massive rally could come over the next couple of weeks.
However, if the bears are able to gain leverage and the September lows are breached, much lower levels of support could come into play. The best way to play the market’s next major move will be to use index call or put options, so stay tuned, as my watch list is exploding with ideas.
I issued a Trade Alert earlier this afternoon, as our position in Kroger (KR) has been working against us. While it was a “cheap” trade as far as the entry premium goes, I wanted to save the remaining value to use for a number of trades that I have ready for a possible bullish breakout through October.
The Dow is higher by 45 points to 18,174, while the S&P 500 is gaining 6 points to 2,143. The Nasdaq is up 4 points to 5,250, and the Russell 2000 is climbing 2 points to 1,230.
Stay locked and loaded into the closing bell in case I decide to take additional action.
Momentum Options Play List
Closed Momentum Options Trades for 2016: 74-27 (73%). 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 12:45 p.m. EST.
I hereby disclose that I will be participating in the following trade(s).
Apple (AAPL, $117.59, up $1.29)
AAPL November 125 calls (AAPL161118C00125000, $1.10, up $0.16)
Entry Price: $1.10 (10/11/2016)
Exit Target: $2.20
Stop Target: None
Action: Resistance is at $118.75-$119. Support is at $116-$115.
Finisar (FNSR, $29.86, down $0.06)
FNSR November 31 calls (FNSR161118C00031000, $0.95, up $0.05)
Entry Price: $1.28 (10/10/2016)
Exit Target: $2.60
Stop Target: $0.60
Action: Support is at $30-$29.50. Resistance is at $31-$31.50.
You can read my detailed write-up on FNSR in the Sept. 22 Mid-Market Update.
Halozyme Therapeutics (HALO, $11.41, down $0.17)
HALO November 13 calls (HALO161118C00013000, $0.46, down $0.14)
Entry Price: $1.07 (9/27/2016)
Exit Target: $2.15
Stop Target: $0.40 (Stop Limit)
Action: Support is at $11.50-$11.25. Resistance is at $11.75-$12.
Viavi Solutions (VIAV, $7.49, up $0.05)
VIAV December 8 calls (VIAV161216C00008000, $0.24, flat)
Entry Price: $0.51 (8/19/2016)
Exit Target: $1.05
Stop Target: $0.05 (Stop Limit)
Action: Resistance is at $7.45-$7.50. Support is at $7.25-$7.15.
Editor and Chief Options Strategist