MomentumOptions.com Mid-Market Update for 12/15/2016

Dollar Rises, Metals Pull Back

2:45pm (EST)

Futures were showing some weakness on the open but improved off its lows to hint higher highs could be in store. Following a slow start, momentum retuned as the bulls recovered half of yesterday’s losses earlier in the session.

Financial stocks are leading the way higher while commodities are taking it on the chin. A continuing rising dollar is forcing metals like copper, steel, gold and silver lower. This comes on the heels of the Fed’s quarter-point rate hike with our recent GLD trade being one of the easiest of the year to predict.

Crude came into week pushing double-nickels ($55/ barrel) but is retesting the $50 level to wind down the week. The recent OPEC euphoria seems to be wearing off with oil needing to hold $50 and a crucial level of support going forward. I still think a run towards $60 comes before a sudden backtest to $40 and I’m still monitoring the sector for a possible bullish or bearish trade.

The Dow is gaining 74 points to 19,866 while the S&P 500 is up 9 points to 2,264. The Nasdaq is adding 20 points to 5,457 and the Russell 2000 is lower by 11 points to 1,367.

I have updated our current trades so let’s go check the action.
Momentum Options Play List

Closed Momentum Options Trades for 2016: 85-34 (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.
Spider Gold Shares (GLD, $107.82, down $1.01)

GLD January 107 puts (GLD170120P00107000, $1.90, up $0.50)

Entry Price: $0.75 (12/142016)
Exit Target: $2.50-$3.50
Return: 140%
Stop Target: $1 (Stop Limit)

Action: Longer-term support is at $108-$107.75. I’m looking for a possible drop below $105 by late January. Resistance is at $109.75-$110.
Viavi Solutions (VIAV, $8.55, up $0.08)

VIAV March 9 calls (VIAV170317C00009000, $0.42, up $0.05)

Entry Price: $0.37 (12/8/2016)
Exit Target: $1.00
Return: 14%
Stop Target: None

Action: Resistance is at $8.75-$9. Short-term support is at $8.40 followed by $8.25-$8.
TiVo (TIVO, $21.35, down $0.15)

TIVO January 22.50 calls (TIVO170120C00022500, $0.50, down $0.05)

Entry Price: $0.33 (11/30/2016)
Exit Target: $0.70
Return: 52%
Stop Target: None

Action: Support is at $21.25-$21. Resistance is at $22-$22.50.
Chicago Bridge & Iron (CBI, $35.17, down $0.35)

CBI January 35 calls (CBI170120C00035000, $1.60, down $0.30)

Entry Price: $1.25 (11/25/2016)
Exit Target: $3 (closed half at $2.20 on 12/12/2016)
Return: 58%
Stop Target: $1.75 (Stop Limit)

Action: The Stop Limit at $1.75 has tripped on today’s backtest to $35.

Support is at $35-$34.75. Resistance is at $36.50-$37.
Imax (IMAX,$31.58, down $0.02)

IMAX January 36 calls (IMAX170120C00036000, $0.25, flat)

Entry Price: $0.90 (11/23/2016)
Exit Target: $1.80
Return: -72%
Stop Target: None

Action: Support is at $31.50-$31.25. Resistance is at $32.50.

You can read my previous comments on IMAX from the 11/28/16 Pre-Market update.
Lattice Semiconductor (LSCC, $7.01, 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 $7-$6.75 and the 50-day moving average. Resistance is at $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