Pre-Market Update for 12/20/2016

Bulls Get Monday Win

8:00am (EST)

The market traded in a tight range on Monday with the bulls holding court for much of the session. The bears made an appearance at the open and kept the indexes from setting fresh highs throughout the day but the momentum is still with the bulls.

The Dow gained 39 points, or 0.2%, to finish at 19,883. The blue-chips traded down to 19,832 on the open with support at 19,800 holding. The run to 19,917 failed resistance at 19,900-20,000 for the fifth-straight session.

The S&P 500 added 4 points, or 0.2%, to close at 2,262. The index held positive territory throughout the session while pushing a high of 2,267. Lower resistance remains at 2,275-2,300. Support is at 2,250 followed by 2,240-2,235.

The Nasdaq climbed 20 points, or 0.4%, to settle at 5,457. Tech slipped a point to 5,436 at the start of trading with upper support at 5,425-5,400 easily holding. The run to 5,483 afterwards pushed upper resistance at 5,450-5,475 and the close above lower resistance was a bullish signal.

The Russell 2000 slipped 2 points, or 0.2%, to end at 1,364. The small-caps also held positive territory throughout Monday with the high reaching 1,375. Lower resistance at 1,375-1,400 was tested but held. Support remains at 1,360-1,350.

The S&P 500 Volatility Index ($VIX, 11.71, down 0.49) traded to a high of 12.51 on the open with resistance at 13.50 holding. The fade to 11.67 afterwards came close to clearing support at 11.50. A close below this level would a bullish development for another run to higher highs.

I’m working on two possible new trades this morning that I should have ready by the Mid-Market update, if the action permits.

From desk to press, futures look like this: Dow (+36); S&P 500 (+5); Nasdaq 100 (+12); Russell (+2).
Momentum Options Play List

Closed Momentum Options Trades for 2016: 87-36 (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.
Viavi Solutions (VIAV, $8.35, down $0.03)

VIAV March 9 calls (VIAV170317C00009000, $0.35, flat)

Entry Price: $0.37 (12/8/2016)
Exit Target: $1.00
Return: -5%
Stop Target: None

Action: Short-term support is at $8.40-$8.35 followed by $8.25-$8. Resistance is at $8.50-$8.75.
TiVo (TIVO, $20.80, down $0.10)

TIVO January 22.50 calls (TIVO170120C00022500, $0.35, flat)

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

Action: Support is at $20.50-$20 and the 50-day moving average. Resistance is at $21.25-$21.50.

Rick Rouse