MomentumOptions.com Pre-Market Update for 12/7/2016

Small-Caps Tap Record High

8:00am (EST)

The market was sluggish for much of Tuesday before picking up steam in the second half of action. The continued momentum was beautiful to see as I mentioned the bulls needed to show some follow through. The run to fresh all-time peaks were lead by the small-caps and another bullish sign.

The Dow advanced 35 points, or 0.2%, to close at 19,251. The blue-chips were weak throughout the first half of trading with the bears pushing a low of 19,184. Support at 19,100-19,000 has now held for 10-straight sessions with a solid floor being formed. The push to 19,255 keeps upper resistance at 19,200-19,350 in play. Continued closes above the latter could lead to a move towards 19,500-19,600 by yearend.

The S&P 500 added 7 points, or 0.3%, to finish at 2,212. The index slipped a couple of points to 2,202 shortly after the open with rising support at 2,200-2,195 holding. A move back below 2,190 would be a bearish development. Resistance at 2,215-2,225 was challenged on the bounce to 2,212 ahead of the closing bell. If the latter is cleared, pencil-in a test to 2,250, possibly, over the next 3-4 weeks.

The Nasdaq gained 24 points, or 0.5%, to settle at 5,333. Tech made a brief trip into negative territory midday to 5,299 with fresh upper support at 5,300-5,275 getting slightly stretched. The turnaround to just below 5,334 into the close was a bullish signal. Near-term resistance remains at 5,350-5,375.

The Russell 2000 surged nearly 15 points, or 1.1%, to end at 1,352. The small-caps tested 1,335 intraday with rising support at 1,330-1,325 trying to be established for the rest of the week. Prior resistance at 1,335-1,340 was blown away following the move to 1,353 and another all-time high.

The S&P 500 Volatility Index ($VIX, 11.79, down 0.35) traded in negative territory for much of the day following a brief look at 12.30 on the opening sluggishness. Short-term resistance has now moved down to 12.50-11.50. Continued closes below 11.50 should get a 10 handle and possibility, single-digits on the map.

I have raised the Stop Limit on the ETFC trade to further protect profits.

From desk to press, futures look like this: Dow (xx); S&P 500 (xx); Nasdaq 100 (xx); Russell (xx).
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, $35.52, up $0.31)

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

Entry Price: $1.20 (11/30/2016)
Exit Target: $2.40
Return: 40%
Stop Target: $1.32, raise to $1.40 (Stop Limit)

Action: Raise the Stop Limit from $1.32 to $1.40.

Fresh resistance and blue-sky territory is at $35.75-$36. Support has moved up to $35-$34.75.
PowerShares QQQ Trust (QQQ, $116.88, up $0.28)

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 $117-$117.50. Support has moved up to $116-$115.
Rambus (RMBS, $13.46, up $0.48)

RMBS February 14 calls (RMBS170217C00014000, $0.55, up $0.19)

Entry Price: $0.53 (11/30/2016)
Exit Target: $1.10
Return: 4%
Stop Target: None

Action: Fresh resistance is at $13.50-$13.75 following Tuesday’s 4% surge to $13.47 intraday. Support is trying to move up to $13.25-$13.
TiVo (TIVO, $20.15, up $0.25)

TIVO January 22.50 calls (TIVO170120C00022500, $0.25, up $0.08)

Entry Price: $0.33 (11/30/2016)
Exit Target: $0.70
Return: -24%
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 close back above $20 was a slightly bullish signal.
Chicago Bridge & Iron (CBI, $33.38, up $0.83)

CBI January 35 calls (CBI170120C00035000, $0.90, up $0.20)

Entry Price: $1.25 (11/25/2016)
Exit Target: $2.50
Return: -28%
Stop Target: None

Action: Shares finished 3 pennies off their high on Tuesday. Resistance is at $33.75-$34. Support is at $33.
Imax (IMAX,$31.25, 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: Resistance is at $31.25-$31.50. Support is at $31-$30.75.

You can read my previous comments on IMAX from the 11/28/16 Pre-Market update.
Microsoft (MSFT, $59.95, down $0.27)

MSFT December 62.50 calls (MSFT161216C00062500, $0.07, down $0.03)

Entry Price: $0.45 (11/22/2016)
Exit Target: $1.00
Return: -84%
Stop Target: None

Action: Resistance is at $60.50-$61. Short-term support is at $59.75-$59.50.
Lattice Semiconductor (LSCC, $6.86, down $0.24)

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: Support is at $6.75 and the 50-day moving average. Resistance is at $7.

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
MomentumOptions.com