Dear Momentum Options Subscriber,
The market enjoyed another banner day on Tuesday, as all of the major indices continued their assault on all-time highs. With my fluff targets now in play, all we have to do is try and relax during the Thanksgiving action. Trading will likely be light today ahead of the Thanksgiving holiday on Thursday, but we will still be watching for warning signs of a market top while we nibble on bullish positions.
The Dow added 67 points, or 0.4%, to settle at 19,023. The blue-chips held positive for the second-straight session while pushing another record high of 19,043. Fresh resistance is at 19,200-19,325 on the close above 19,000. Support remains at 18,900-18,800.
The S&P 500 gained 4 points, or 0.2%, to end a shade below 2,203. The index tested an intraday low of 2,194, with rising support at 2,190-2,185 holding. The late-day run to just south of 2,205 and a fresh all-time high should get 2,225-2,250 into the mix.
The Nasdaq climbed 17 points, or 0.3%, to close at 5,386. Tech traded to a morning lifetime high of 5,392, which was just shy of clearing blue-sky resistance at 5,400. A close above the latter could lead to a run to 5,450-5,500. Rising support is at 5,350-5,325.
The Russell 2000 added 12 points, or 0.9%, to finish at 1,334. The small-caps also held green territory throughout Tuesday’s session after opening at 1,322. The push to 1,335 into the closing bell keeps my near-term fluff target at 1,350 in play. Support is trying to move up to 1,320-1,315.
The S&P 500 Volatility Index ($VIX, 12.41, down 0.01) kissed a high of 12.83 during the first half of the action, with lower resistance at 13-13.50 holding. The continued closes below 12.50 remain bullish, but support at 12-11.50 is still a challenge.
I have raised the Stop Limits on our positions in Tower Semiconductor (TSEM) and Apple (AAPL) below, so be sure to make those adjustments in your trading accounts. I could also have a New Trade today ahead of the Mid-Market Update, so stay locked and loaded throughout the morning in case I decide to pull the trigger.
From desk to press, futures look like this: Dow (+10); S&P 500 (-0.5); Nasdaq 100 (-2.5); Russell (+0.1).
Momentum Options Play List
Closed Momentum Options Trades for 2016: 79-33 (71%). 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).
Tower Semiconductor (TSEM, $18.34, up $0.11)
TSEM January 19 calls (TSEM170120C00019000, $0.65, up $0.10)
Entry Price: $0.50 (11/16/2016)
Exit Target: $1.00
Stop Target: $0.39, raise to $0.45 (Stop Limit)
Action: Raise the Stop Limit from $0.39 to $0.45.
Resistance is at $18.25-$18.50. Yesterday’s high reached a fresh 52-week peak of $18.53. Rising support is at $18.25-$18.
Apple (AAPL, $111.80, up $0.07)
AAPL January 115 calls (AAPL170120C00115000, $1.97, down $0.07)
Entry Price: $1.24 (11/15/2016)
Exit Target: $2.50
Stop Target: $1.75, raise to $1.80 (Stop Limit)
Action: Raise the Stop Limit from $1.75 to $1.80.
Yesterday’s low on the calls tapped $1.88. Resistance is at $112-$112.50. Support is at $110.
Microsoft (MSFT, $61.12, up $0.26)
MSFT December 62.50 calls (MSFT161216C00062500, $0.44, up $0.01)
Entry Price: $0.45 (11/22/2016)
Exit Target: $1.00
Stop Target: None
Action: Monday’s peak reached $61.26. Resistance is at $61.25-$61.50. Short-term support is at $60.50-$60.
Lattice Semiconductor (LSCC, $7.37, down $0.11)
LSCC December 7.50 calls (LSCC161216C00007500, $0.11, flat)
Entry Price: $0.30 (10/12/2016)
Exit Target: $0.60 (Limit Order)
Stop Target: None
Action: Support is at $7.50-$7.25. Resistance is at $7.75-$8.
Editor and Chief Options Strategist