MomentumOptions.com Mid-Market Update for 12/9/2016

Volatility Slips as Bulls Push New Highs

12:15pm (EST)

One of the key indicators I’m watching ahead of the weekend is the action in the S&P 500 Volatility Index ($VIX, 12.15, down 0.49). I mentioned the VIX has closed higher the past two sessions and a lower close, especially below 12.50, would be a slightly bullish sign for next week.

With the bulls pushing records highs into a Friday, this is also a positive development, providing the gains hold into the closing bell. This means Wall Street might be willing to stay long again as the blue-chips are on pace for their fifth-straight week of gains. The other major indexes are on track for a swell week after having the win streaks snapped at four-straight.

The Dow is gaining 50 points to 19,665 while the S&P 500 is adding 6 points to 2,252. The Nasdaq is up 22 points to 5,439 and the Russell 2000 is higher by a point to 1,387.

I have updated our current trades and I’m working on a possible New Trade ahead of the closing bell. The pin action has been good to us this week as a number of trades are showing strong gains while a few other have come back significantly. If you don’t hear from me by 3pm (EST) it means I’m standing pat. Until then, have a great and safe weekend and I will be back Monday morning with a full update.
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.
Viavi Solutions (VIAV, $8.51, up $0.07)

VIAV March 9 calls (VIAV170317C00009000, $0.40, up $0.04)

Entry Price: $0.37 (12/8/2016)
Exit Target: $1.00
Return: 8%
Stop Target: None

Action: Resistance is at $8.75-$9. Support is at $8.25-$8.
E*Trade Financial (ETFC, $35.41, down $0.03)

ETFC January 35 calls (ETFC170120C00035000, $1.70, down $0.05)

Entry Price: $1.20 (11/30/2016)
Exit Target: $2.40
Return: 42%
Stop Target: $1.50 (Stop Limit)

Action: Resistance is at $35.75-$36. Support is at $35-$34.75.
PowerShares QQQ Trust (QQQ, $119.42, up $0.85)

QQQ January 122 calls (QQQ170120C00122000, $0.90, up $0.20)

Entry Price: $0.90 (11/30/2016)
Exit Target: $1.80
Return: 0%
Stop Target: None

Action: Resistance is at $119.50-$120. Support is at $118.50-$118.
Rambus (RMBS, $14.17, down $0.04)

RMBS February 14 calls (RMBS170217C00014000, $0.90, flat)

Entry Price: $0.53 (11/30/2016)
Exit Target: $1.10
Return: 70%
Stop Target: 65 cents (Stop Limit)

Action: Resistance is at $14.25 followed by $14.50 and the 52-week peak. Near-term support is at $14-$13.75.
TiVo (TIVO, $21.70, up $0.20)

TIVO January 22.50 calls (TIVO170120C00022500, $0.55, flat)

Entry Price: $0.33 (11/30/2016)
Exit Target: $0.70
Return: 67%
Stop Target: None

Action: Resistance is at $22-$22.50. Support is at $21.25-$21.
Chicago Bridge & Iron (CBI, $35.26, up $0.49)

CBI January 35 calls (CBI170120C00035000, $1.60, up $0.15)

Entry Price: $1.25 (11/25/2016)
Exit Target: $2.50
Return: 28%
Stop Target: $1.30 (Stop Limit)

Action: Fresh resistance is at $35.50-$35.75. Support has moved up to $35-$34.75.
Imax (IMAX,$32.67, up $0.22)

IMAX January 36 calls (IMAX170120C00036000, $0.30, flat)

Entry Price: $0.90 (11/23/2016)
Exit Target: $1.80
Return: -67%
Stop Target: None

Action: Resistance is at $32.50-$32.75. Support is at $32.

You can read my previous comments on IMAX from the 11/28/16 Pre-Market update.
Microsoft (MSFT, $61.77, up $0.76)

MSFT December 62.50 calls (MSFT161216C00062500, $0.27, up $0.12)

Entry Price: $0.45 (11/22/2016)
Exit Target: $1.00
Return: -40%
Stop Target: None

Action: Resistance is at $61.75-$62. Support is trying to move up to $61.
Lattice Semiconductor (LSCC, $6.98, down $0.03)

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-$7.25.

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