Pre-Market Update for 12/6/2016

Small-Caps Lead Bullish Charge/ Important Login Information

8:00am (EST)

Although the Dow got much of Monday’s press following its run to another record high, I mentioned I would be more focused on the action in Tech and the small-caps. Both sectors outpaced the broader market and volatility cooled from last week’s hot tape. Continued follow through is needed today by the bulls, if not, the bears will be looking to push fresh December lows.

The Dow gained 45 points, or 0.2%, to end at 19,216. The blue-chips traded to a lifetime high of 19,274 shortly after the open while holding lower resistance at 19,200-19,350 into the closing bell. There is additional fluff to 19,500-19,600 on sustained momentum. Near-term support remains at 19,100-19,000.

The S&P 500 jumped 12 points, or 0.6%, to close at 2,204. The index opened at 2,200 while reaching a morning peak of 2,209. Resistance is at 2,215-2,225 with a move above the latter likely leading to 2,250. Support remain at 2,195-2,190 with risk to 2,175-2,170 on a breech below the latter.

The Nasdaq surged 53 points, or 1%, to finish at 5,308. Tech made a run to 5,321 intraday and the close back above 5,300 was a slightly bullish signal. Resistance is at 5,350-5,375 with a close above the latter getting all-time highs back in the mix. Support has moved up to 5,275-5,250.

The Russell 2000 jumped 23 points, or 1.8%, to settle at 1,337. The small-caps held positive territory throughout the session while finishing a half-point off their peak at 1,338. Near-term resistance is at 1,335-1,340 with the all-time high at 1,347. A close above this level gets 1,375-1,400 in the mix. Fresh support is at 1,325-1,320.

The S&P 500 Volatility Index ($VIX, 12.14, down 1.98) tanked 14% and went out at its session low to close below the 12.50 level. This was a major development, providing this level holds for the rest of the week. A close above lower resistance at 13.50, again, could indicate a choppy trading range developing, or worse. I’ve have talked about continued closes below 11.50 could lead to 10 – and throughout the year, I have mentioned the possibility of single-digits for the VIX.

I wanted to provide a quick update on the website and emails. It was a daunting challenge to try to pull this project off over a weekend. I apologize you did not receive the daily emails until late in the day and please bear with us throughout the week as we work out the kinks.

If you got an email from please ignore. It is our host and website provider. However, I have been informed you still need to initiate a new password. If you need help, email or call us. Here is an easy link to get started and takes less than 20 seconds to do.

This link is on the login page that says “forgot your password”. You click this, put in your email address and it sends you a password reset link to your email.

It has been amazing to talk to each subscriber one-on-one, and something I suggested to my past publisher many times. I have a real good feel on how to improve the service and have received great feedback on what I can do enhance your trading experience. I thank each and everyone for their patience and just as important, your patronage. does not have any of your credit card information and we are trying to work through thousands of paid and unpaid subscribers. I will be honoring all subscriptions and all I ask is that you resign through our website when your membership expires. If you receive an automatic renewal, it is NOT from my company so please check if you are billed.

For those that have tried Momentum Options on a short-term basis, and haven’t been with me for 2016 and the last 9 years, hang tight. Remember, the major indexes are exactly where I said they would be back in late February and most of the current trades have seven weeks before expiration.

For Easy Money Subscribers, the newsletter has done well in its short existence and current has a nice winner with ARRY. For Momentum Options subscribers that haven’t tried this service, and vice versa, check out the website for details on how the newsletters are different.

In February 2015, my chart work showed 5,500-6,000 coming into play for Tech. Naturally, the time frame for Nasdaq testing 6,000 will come in 2017, or perhaps 2018. However, I do believe 5,500 is attainable by yearend, or certainly by mid-January given the current trend and momentum.

After midnight, futures looked like this: Dow (-5); S&P 500 (-1); Nasdaq 100 (flat); Russell (-1).
Momentum Options Play List

Closed Momentum Options Trades for 2016: 81-34 (70%). 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.
E*Trade Financial (ETFC, $35.21, up $0.28)

ETFC January 35 calls (ETFC170120C00035000, $1.75, flat)

Entry Price: $1.20 (11/30/2016)
Exit Target: $2.40
Return: 40%
Stop Target: $1.25, raise to $1.32 (Stop Limit)

Action: Raise the Stop limit from $1.25 to $1.32.

Shares traded to a fresh 52-week peak of $35.85 yesterday. Resistance is at $35.25-$35.50. Support is at $34.75-$34.50.
PowerShares QQQ Trust (QQQ, $116.60, up $0.90)

QQQ January 122 calls (QQQ170120C00122000, $0.32, up $0.03)

Entry Price: $0.90 (11/30/2016)
Exit Target: $1.80
Return: -65%
Stop Target: None

Action: Resistance is at $116-$116.50 and the 100-day moving average. Near-term support is at $115-$114. Hopefully, last week was a temporary double-bottom and why i mentioned there needed to be follow through today.
Rambus (RMBS, $12.98, up $0.22)

RMBS February 14 calls (RMBS170217C00014000, $0.40, up $0.09)

Entry Price: $0.53 (11/30/2016)
Exit Target: $1.10
Return: -25%
Stop Target: None

Action: Resistance is at $13 and the 100-day moving average. Support is at $12.75 and the 200-day moving average. I will have more on RMBS in the coming days and it is one of my favorite takeover targets for 2017.
TiVo (TIVO, $19.90, up $0.25)

TIVO January 22.50 calls (TIVO170120C00022500, $0.17, flat)

Entry Price: $0.33 (11/30/2016)
Exit Target: $0.70
Return: -48%
Stop Target: None

Action: Resistance is at $20-$20.25 and the 50/100-day moving averages. Support is at $19.50-$19.25 and the 200-day moving average. The company’s recent deal with Netflix has gone unnoticed by Wall Street and TiVo is a company I have followed for years.

I also have TIVO on my takeover target list for 2017 with a buyout near $30. However, shares could also trade to the upper $20’s over the next 3-6 months without takeover chatter. I’m also looking at the TIVO April 22.50 calls (TIVO170421C00022500) as a possible “piggy-back” trade on continued closes back above the $20.25 level.
Chicago Bridge & Iron (CBI, $32.55, up $0.45)

CBI January 35 calls (CBI170120C00035000, $0.70, up $0.05)

Entry Price: $1.25 (11/25/2016)
Exit Target: $2.50
Return: -44%
Stop Target: None

Action: Resistance is at $32.50-$33. Support is at $32-$31 and the 100-day moving average.
Imax (IMAX,$31.15, up $0.10)

IMAX January 36 calls (IMAX170120C00036000, $0.20, flat)

Entry Price: $0.90 (11/23/2016)
Exit Target: $1.80
Return: -78%
Stop Target: None

Action: Support is at $31-$30.75 and the 50/100/200-day moving averages followed by $30.50-$30. Resistance is at $31.25-$31.50.

You can read my previous comments on IMAX from the 11/28/16 Pre-Market update.
Microsoft (MSFT, $60.22, up $0.97)

MSFT December 62.50 calls (MSFT161216C00062500, $0.10, up $0.02)

Entry Price: $0.45 (11/22/2016)
Exit Target: $1.00
Return: -63%
Stop Target: None

Action: Shares kissed $60.50 on Monday while holding the $60 level. Resistance is at $60.50-$61. Support has moved up to $59.75-$59.50. I would like to see new highs and a move above $61 by the end of the week as these options expire in 10 days.
Lattice Semiconductor (LSCC, $7.10, up $0.16)

LSCC December 7.50 calls (LSCC161216C00007500, $0.05, flat)

Entry Price: $0.30 (10/12/2016)
Exit Target: 60 cents (Limit Order)
Return: -83%
Stop Target: None

Action: Lawmakers are involved with the recent takeover of LSCC as security concerns have come into play. I will have more details in the coming days but this could give shares a bump today.

Resistance is at $7.20-$7.25. Support is at $7-$6.75 and the 50-day moving average. Continue to hold as the break-even price is at $7.80.

You can read my previous comments on LSCC and the buyout offer of $8.30 a share from the 11/4/16 Pre-Market update
Rick Rouse