MomentumOptions.com Pre-Market Update for 12/15/2016
Fed Finally Makes a Move/ Trade Alert (CBI, GLD)/ Profit Alerts (RMBS, QQQ)
The bulls pushed fresh record highs ahead of the Fed’s widely anticipated quarter-point rate hike on Wednesday but pulled back afterwards to intraday lows following the official news. The bears did little damage as fresh support levels held but they will be looking to extend their win streak to two-straight ahead of option expiration and triple-witching on Friday.
The Dow dropped 118 points, or 0.6%, to settle at 19,792. The blue-chips tested another record high of 19,966 midday with upper resistance at 19,800-20,000 holding by a thread. The fade to 19,748 afterwards and close below 19,800 gets fresh support 19,700-19,600 in play.
The S&P 500 sank 18 points, or 0.8%, to end just below 2,253. The index made a run to 2,276 intraday but fell shy of its record high by a point. Lower resistance at 2,275-2,300 held before the backtest to 2,248. The close above fresh support at 2,250 was slightly bullish with additional help at 2,240-2,235 on a move back below this level.
The Nasdaq gave back 27 points, or 0.5%, to finish at 5,436. Tech traded in a tight range before making a push to 5,476 after the Fed news. Resistance at 5,450-5,475 and the all-time of 5,486 was stretched again but held. The stumble to 5,425 afterwards held upper support is at 5,425-5,400.
The Russell 2000 tumbled 17 points, or 1.3%, to close at 1,356. The small-caps were weak throughout the session following a one-point trip into positive territory to 1,374 on the open. Lower resistance at 1,375-1,400 held before the breakdown to 1,354. Backup support at 1,360-1,350 and close in the middle was a neutral signal.
The S&P 500 Volatility Index ($VIX, 13.19, up 0.47) kissed a low of 12.48 with lower support at 12.50-11.50 continuing to be a trouble spot. The blip to 13.39 during the second half of action held fresh, lower resistance at 13.50-15.
I have set the parameters of our GLD that caught fire after the rate hike news and I have adjusted the Stop Limit for the CBI position. We were also stopped out of RMBS and the QQQ’s for nice double-digit profits. These represented our 84th and 85th winning trades for the year!
From desk to press, futures look like this: Dow (+23); S&P 500 (-1); Nasdaq 100 (xx); Russell (-5).
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, $108.83, down $1.62)
GLD January 107 puts (GLD170120P00107000, $1.40, up $0.54)
Entry Price: $0.75 (12/142016)
Exit Target: $2.50-$3.50
Stop Target: $1 (Stop Limit)
Action: Set a Exit Target at $2.50-$3.50. Set an initial Stop Limit at $1 to protect profits.
I was banking on Gold dropping below $110 as I have been highlighting this level in recent weeks. 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, $8.47, down $0.01)
VIAV March 9 calls (VIAV170317C00009000, $0.37, flat)
Entry Price: $0.37 (12/8/2016)
Exit Target: $1.00
Stop Target: None
Action: Short-term support is at $8.40 followed by $8.25-$8. Resistance is at $8.75-$9.
PowerShares QQQ Trust (QQQ, $120.21, down $0.25)
QQQ January 122 calls (QQQ170120C00122000, $1.17, down $0.15)
Entry Price: $0.90 (11/30/2016)
Exit Target: $1.80 (Limit Order on 1/2)
Stop Target: $1.12 (Stop Limit)
Action: The Stop limit at $1.12 tripped into yesterday’s close following the low at $1.05. I will keep the QQQ’s on my Watch List to play continued strength or a pullback in the coming days.
Rambus (RMBS, $14.01, down $0.24)
RMBS February 14 calls (RMBS170217C00014000, $0.85, down $0.10)
Entry Price: $0.53 (11/30/2016)
Exit Target: $1.10
Stop Target: 80 cents (Stop Limit)
Action: The Stop Limit at 80 cents tripped on the dip below $14 yesterday. I will likely come back to RMBS of shares can clear and hold $14.25 in the coming days.
Near-term support is at $14-$13.75. Wednesday’s bottom reached $13.97. Resistance is at $$14.25-$14.50.
TiVo (TIVO, $21.50, down $0.05)
TIVO January 22.50 calls (TIVO170120C00022500, $0.50, down $0.05)
Entry Price: $0.33 (11/30/2016)
Exit Target: $0.70
Stop Target: None
Action: Support is at $21.25-$21. Resistance is at $22-$22.50.
Chicago Bridge & Iron (CBI, $35.52, down $0.54)
CBI January 35 calls (CBI170120C00035000, $1.90, down $0.20)
Entry Price: $1.25 (11/25/2016)
Exit Target: $3 (closed half at $2.20 on 12/12/2016)
Stop Target: $1.85, lower to $1.75 (Stop Limit)
Action: Lower the Stop Limit from $1.85 down to $1.75 to give the trade a little wiggle room. Yesterday’s low on the calls tapped $1.87.
Support is at $35-$34.75. Resistance is at $36.50-$37.
Imax (IMAX,$31.60 down $0.20)
IMAX January 36 calls (IMAX170120C00036000, $0.25, flat)
Entry Price: $0.90 (11/23/2016)
Exit Target: $1.80
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, $7.04, down $0.08)
LSCC December 7.50 calls (LSCC161216C00007500, $0.05, flat)
Entry Price: $0.30 (10/12/2016)
Exit Target: 60 cents (Limit Order)
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.