Pre-Market Update for 12/16/2016

Resistance Holds

8:00am (EST)

The bulls got back on track Thursday and pushed higher highs but failed to clear and hold upper resistance levels. Volatility settled down a bit but closed outside of upper support, setting the stage for a possible showdown on regular December option expiration and triple-witching today.

The Dow added 59 points, or 0.3%, to end at 19,852. The blue-chips held positive territory throughout the session while tapping a high of 19,951. Upper resistance at 19,800-20,000 held for the third-straight session. Support remains at 19,700-19,600 if 19,800 fails to hold.

The S&P 500 gained 8 points, or 0.4%, to finish at 2,253. The index also held green throughout Thursday while pushing a peak of 2,272. Lower resistance at 2,275-2,300 and the close back above 2,250 was slightly bullish. Support remains at 2,240-2,235 ahead of the weekend.

The Nasdaq advanced 20 points, or 0.4%, to close at 5,456. Tech tested 4,585 intraday but fell shy of setting a fresh record high by a point. The close into lower resistance at 5,450-5,475 was a good omen. Support is at 5,425-5,400 if 5,450 fails to hold.

The Russell 2000 jumped 10 points, or 0.8%, to settle at 1,366. The small-caps slipped 2 points on the open to 1,354 with support at 1,360-1,350 getting split. The rebound to 1,374 failed lower resistance at 1,375-1,400.

The S&P 500 Volatility Index ($VIX, 12.79, down 0.40) traded up to 13.24 intraday with lower resistance at 13.50-15 holding. The fade to 12.46 breeched upper support at 12.50-11.50 but the close outside this level was a neutral reading.

I could have a New Trade, or two, shortly after the open as the portfolio has room for up to 3-5 positions. We have done well this month ringing the register on a number of bullish positions but we will likely take a hit with the LSCC trade by today’s close.

From desk to press, futures look like this: Dow (+18); S&P 500 (+1); Nasdaq 100 (+2); Russell (+1).


Momentum Options Play List

Closed Momentum Options Trades for 2016: 86-34 (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, $107.34, down $1.49)

GLD January 107 puts (GLD170120P00107000, $1.95, up $0.55)

Entry Price: $0.75 (12/142016)
Exit Target: $2.50-$3.50
Return: 160%
Stop Target: $1 (Stop Limit)

Action: GLD tested a low of $107 with the puts reaching a peak of $2.17.

Support is at $106.50. I’m looking for a possible drop below $105 by late January. Fresh resistance is at $107.75-$108.


Viavi Solutions (VIAV, $8.53, up $0.06)

VIAV March 9 calls (VIAV170317C00009000, $0.40, up $0.03)

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

Action: Yesterday’s high reached $8.69 and the 52-week high is at $8.76. Resistance is at $8.75-$9. Short-term support is at $8.40 followed by $8.25-$8.


TiVo (TIVO, $20.90, down $0.60)

TIVO January 22.50 calls (TIVO170120C00022500, $0.35, down $0.20)

Entry Price: $0.33 (11/30/2016)
Exit Target: $0.70
Return: 6%
Stop Target: None

Action: Support is at $21.25-$21. Resistance is at $22-$22.50.


Imax (IMAX,$31.35, down $0.25)

IMAX January 36 calls (IMAX170120C00036000, $0.20, down $0.05)

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, $7.02, down $0.02)

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: These options expire today and will be worthless by the close if shares stay below $7.50. You can try to get a nickel on the close but it’s unlikely we get filled.

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.