Dear Momentum Options Subscriber,

The bulls held court for much of Monday’s session, while the bears pushed near-term support. Although the action was frustrating to follow, there were some bullish clues that suggest higher highs should be in play into the end of the month.

The Dow dipped 52 points, or 0.3%, to end at 18,086. The blue-chips tapped a high of 18,162 during the opening minutes, with resistance at 18,200 and the 100-day moving average holding. The fade to 18,063 held short-term support at 18,000-17,800.

The S&P 500 gave back a 6-pack, or 0.3%, to settle at 2,126. The index pushed a high of 2,135 during the open, with lower resistance at 2,140-2,150 easily holding. Upper support at 2,125-2,120 was breached following the intraday pullback to 2,124, and there is risk to 2,110-2,100 on a move below the latter.

The Nasdaq declined 14 points, or 0.3%, to finish at 5,199. Tech was weak throughout the session following the morning run to just below 5,220. Resistance at 5,250-5,275 and the 50-day moving average easily held before the fade to 5,196 during the second half of trading. Near-tern support is at 5,175-5,150.

The Russell 2000 slipped 2 points, or 0.2%, to close at 1,210. The small-caps made a mid-day run to 1,215, but they failed to clear lower resistance at 1,225-1,230. Near-term support at 1,210-1,200 and the 100-day moving average held following the backtest to 1,209 into the closing bell.

The S&P 500 Volatility Index ($VIX, 16.21, up 0.09) spiked on the open and stayed elevated throughout the session. The mid-day high of 17.11 split lower resistance at 16.50-17.50. Support remains at 15-14.50 and the 100-day moving average.

From desk to press, futures look like this: Dow (+88); S&P 500 (+13); Nasdaq 100 (+32); Russell (+9).

Momentum Options Play List

Closed Momentum Options Trades for 2016: 74-28 (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 8:00 a.m. EST.

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

 

E*Trade Financial (ETFC, $28.13, down $0.38)

ETFC November 29 calls (ETFC161118C00029000, $0.76, down $0.17)

Entry Price: $0.90 (10/17/2016)

Exit Target: $1.80

Return: -16%

Stop Target: None

Action: Monday’s low reached $27.99. Support is at $28-$27.75. Resistance is at $28.25-$28.50.

 

PowerShares QQQ ETF (QQQ, $116.82, down $0.32)

QQQ November 120 calls (QQQ161118C00120000, $0.87, down $0.03)

Entry Price: $0.99 (10/13/2016)

Exit Target: $2.00

Return: -12%

Stop Target: None

Action: Yesterday’s low tapped $116.67 to split support at $117-$116. Resistance is at $117.25-$118 and the 50-day moving average.

 

Lattice Semiconductor (LSCC, $6.09, up $0.08)

LSCC December 7.50 calls (LSCC161216C00007500, $0.25, flat)

Entry Price: $0.30 (10/12/2016)

Exit Target: $0.60-$0.90

Return: -17%

Stop Target: None

Action: Near-term support is at $6.00-$5.90 and the 100-day moving average. Resistance is at $6.25 and the 50-day moving average. Monday’s range was $6-$6.11.

 

Apple (AAPL, $117.55, down $0.08)

AAPL November 125 calls (AAPL161118C00125000, $0.88, down $0.09)

Entry Price: $1.10 (10/11/2016)

Exit Target: $2.20

Return: -20%

Stop Target: None

Action: Support is at $117-$116.50. Yesterday’s low reached $116.78. Resistance is at $118-$118.25.

 

Finisar (FNSR, $28.99, up $0.11)

FNSR November 31 calls (FNSR161118C00031000, $0.55, down $0.01)

Entry Price: $1.28 (10/10/2016)

Exit Target: $2.60

Return: -57%

Stop Target: $0.30 (Stop Limit)

Action: Yesterday’s high touched $29.39. Resistance is at $29-$29.50. Support is at $28.75-$28.50.

 

Viavi Solutions (VIAV, $7.19, down $0.07)

VIAV December 8 calls (VIAV161216C00008000, $0.18, up $0.01)

Entry Price: $0.51 (8/19/2016)

Exit Target: $1.05

Return: -65%

Stop Target: $0.05 (Stop Limit)

Action: Support is at $7.25-$7.150 and the 100-day moving average. Resistance is at $7.45-$7.50 and the 50-day moving average.

Trade on!

Rick Rouse
Editor and Chief Options Strategist
Momentum Options